Global Business Cycle Indicators

Australia

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Released: Tuesday, February 18, 2014

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

• The Conference Board LEI for Australia increased in December.  All seven components advanced, with rural goods exports, the yield spread, and building approvals making the largest positive contributions. Between June and December 2013, the leading economic index increased 2.2 percent (about a 4.4 percent annual rate), faster than the growth of 1.2 percent (about a 2.4 percent annual rate) for the previous six months. The strengths among the leading indicators have remained more widespread than the weaknesses in recent months.
• The Conference Board CEI for Australia, a measure of current economic activity, also increased in December. The coincident economic index increased 0.7 percent (about a 1.3 percent annual rate) during the six-month period ending December 2013, the same rate of increase as in the previous six months. The strengths among the coincident indicators remain more widespread than the weaknesses in the last six months. Real GDP increased at a 2.3 percent annual rate in the third quarter of 2013, down from 2.9 percent growth (annual rate) in the second quarter.
• The LEI for Australia increased in December for the fourth consecutive month, and its six-month growth rate has continued to pick up in recent months. The CEI increased for the fifth consecutive month and its six-month growth has been relatively steady.  Taken together, the widespread growth in both the LEI and CEI suggests that the economy will continue to expand in the first half of 2014, and the pace of growth is likely to pick up.    

LEADING INDICATORS. All seven components in The Conference Board LEI for Australia increased in December.  The positive contributors to the index — in order from the largest positive contributor to the smallest — are rural goods exports, the yield spread, building approvals, money supply*, the sales to inventories ratio*, gross operating surplus*, and share prices.  

With the 0.8 percent increase in December, The Conference Board LEI for Australia now stands at 127.7 (2004=100).  Based on revised data, this index increased 0.2 percent in November and increased 0.6 percent in October. During the six-month period through December, the leading economic index increased 2.2 percent, with all seven components increasing (diffusion index, six-month span equals 100.0 percent).<>p&

COINCIDENT INDICATORS. Three of the four components in The Conference Board CEI for Australia increased in December.  The increases – in order from the largest positive contributor to the smallest – occurred in retail trade, household gross disposable income*, and industrial production*. Employed persons decreased in December.

With the increase of 0.1 percent in December, The Conference Board CEI for Australia now stands at 123.5 (2004=100).  Based on revised data, this index increased 0.2 percent in both November and October.  During the six-month period through December, the coincident economic index increased 0.7 percent, with three of the four components in the series making positive contributions (diffusion index, six-month span equals 75.0 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” 6 P.M. ET on February 17, 2014.  Some series are estimated as noted below.

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 building approvals, 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.

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