The Westpac-Melbourne Institute Leading Index of economic growth has recorded its first substantive improvement in over a year raising hopes that economic recovery is on the horizon.
The Index, which indicates the likely pace of economic activity three to nine months into the future, rose to -5.1 per cent in March 2009, from -6.0 per cent in February 2009.
Matthew Hassan, Westpac senior economist, said the improvement was consistent with indicators suggesting the pace of global economic contraction had eased in recent months. Nevertheless, Mr Hassan said economic recovery was unlikely to occur until the last quarter of the year – at the earliest.
“Even if we see similar improvements in the months ahead it will take three or four months for the Index to return to normal levels consistent with positive growth, implying that a recovery in the real economy is unlikely before the December 2009 quarter at the earliest.”
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