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Bill Evans, Chief Economist at Westpac, notes that the six month annualised growth rate in the Westpac- Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, increased slightly from +0.77% in March to +0.82% in April.

Key Quotes

“The growth rate in the Leading Index remains in positive territory signalling above trend growth over much of the remainder of 2018. Drivers of the above trend growth in the Index over the last six months have been almost exclusively international – commodity prices and US industrial production. Domestic components which focus on Confidence; housing; and the labour market have been largely flat.”

“Westpac’s own forecast for growth in 2018 is 2.7%, around trend, and therefore somewhat weaker than is currently implied by the Leading Index.”