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Benchmark Revisions - January 2008

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Released: Tuesday, August 23, 2011

The Conference Board Leading Economic Index® (LEI) for Australia declined 0.8 percent and The Conference Board Coincident Economic Index ® (CEI) increased 0.1 percent in June.

  • The Conference Board LEI for Australia declined again in June for the fifth time in six months. Building approvals continued to fall, and money supply* and stock prices also made negative contributions to the index this month. With the decline, the six-month change in the leading economic index fell sharply — declining by 1.7 percent (about a -3.5 percent annual rate) in the first half of 2011, down from the increase of 1.4 percent (about a 2.9 percent annual rate) in the second half of last year. Moreover, the weaknesses among the leading indicators have become more widespread than the strengths in the last six months.
  • The Conference Board CEI for Australia, a measure of current economic activity, increased slightly in June. Gains from employment and household income* offset negative contributions from industrial production* and retail trade. With the small gain in June, the six-month change in the coincident economic index was 0.1 percent (about a 0.2 percent annual rate) during the first half of this year, down from 0.7 percent (about a 1.4 percent annual rate) for the previous six months. At the same time, real GDP contracted by 4.7 percent (annual rate) in the first quarter of this year, down from the increase of 3.3 percent annual rate in the last quarter of 2010.
  • The Conference Board LEI for Australia continued falling through June, and its six-month growth rate has declined sharply in the first half of the year. At the same time, The Conference Board CEI for Australia has been essentially flat since the beginning of this year, and its six-month growth rate has also slowed compared to the second half of last year.  Taken together, the current behavior of the composite indexes suggests that economic activity will remain weak in the near term.

LEADING INDICATORS. Two of the seven components in The Conference Board LEI for Australia increased in June. The positive contributors to the index include rural goods exports and yield spread. Building approvals, money supply*, share prices, and the sales to inventories ratio* declined, while gross operating surplus* remained unchanged in June.

With the 0.8 percent decrease in June, The Conference Board LEI for Australia now stands at 118.2 (2004=100). Based on revised data, this index declined 0.2 percent in May and increased 0.1 percent in April. During the six-month period through June, the leading economic index decreased 1.7 percent, and two of the seven components increased (diffusion index, six-month span equals 28.6 percent).

COINCIDENT INDICATORS. Two of the four components in The Conference Board CEI for Australia increased in June. The increases occurred in employed persons and household gross disposable income*. Retail trade and industrial production* declined in June.

With the increase of 0.1 percent in June, The Conference Board CEI for Australia now stands at 117.9 (2004=100). Based on revised data, this index decreased 0.1 percent in both May and April. During the six-month period through June, the coincident economic index increased 0.1 percent, with two of the four components making positive contributions (diffusion index, six-month span equals 50.0 percent).

DATA AVAILABILITY. The data series used to compute The Conference Board Leading Economic Index® (LEI) for Australia and The Conference Board Coincident Economic Index® (CEI) for Australia reported in this release are those available “as of” 10 A.M. ET on August 22, 2011. Some series are estimated as noted below.

NOTES: Series in The Conference Board LEI for Australia that are based on our estimates are sales to inventory ratio and gross operating surplus for private non-financial corporations, the implicit price index used to deflate rural goods exports, and the CPI used to deflate money supply M3. Series in The Conference Board CEI for Australia that are based on our estimates are industrial production and household disposable income. CPI was used to deflate retail trade.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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