Latest Index Further Indicates Recession
Friday January 30, 2009
Figures released today from the Westpac/Melbourne Institute index of economic activity showed contraction of 2.2 per cent in November, as opposed to a downwardly revised 0.3 per cent contraction in October.
This is the first time since 2001 that the index has shown negative readings, with the 2.2 per cent recording far lower than the long-run growth rate of 3.5 per cent.
Survey conclusions have shown that over the coming three to nine months, this is the expected pace of economic growth with indicators of money supply, home approvals and manufacturing materials prices being used to compile results.
The index has fallen from 256 points in October to 253.5 in November after several months of declining home sales, low GDP growth and a rise in the unemployment rate.
Economists from the index stated that it is useful in predicting the chances of Australia experiencing a recession with the recent decline reflecting the further deterioration in the global growth environment.
