Posted on 17 Mar 2010
AUSTRALIAN economic growth is expected to continue growing strongly, on par with previous cyclical highs experienced during the resources boom.
The Westpac-Melbourne Institute leading index of economic activity, which indicates the likely pace of activity three to nine months into the future, posted an annualised growth rate of 6.3 per cent in January.
The result, released today, was above the long-term trend growth rate of 2.7 per cent.
Westpac Senior Economist Matthew Hassan said after rising sharply over the second half of 2009, the Leading Index continues to point to "strong momentum" carrying into 2010.
"Although the annualised growth rate in the Index held steady in January ending the rapid month to month acceleration seen since May last year it remains well above its long run average, on a par with previous cyclical highs," he said.
He said there were now clear signs that the pick-up foreshadowed by the Leading Index is showing through in actual activity with the annualised growth rate in the Coincident Index rising back above trend for the first time since September 2007.
The growth turnaround from 0.4 per cent in August 2009 to 6.3 in January has been driven by industrial commodity prices, US industrial production, real corporate profits, productivity, domestic labour market conditions and dwelling approvals.
