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Aug 01 2012

Australian Policymakers' Confidence May Be Misguided

ECRI has just updated its Australian Long Leading Index (AULLI). The value of this index lies in its ability to anticipate cyclical turns in the economy before conventional leading indexes.

Australia recently celebrated its 21st consecutive year of economic expansion, and the country’s low interest, inflation and unemployment rates have its policymakers content, with Treasurer Wayne Swan calling the country’s economic fundamentals “the envy of the developed world.” However, consumer and business confidence surveys show growing pessimism over concerns of falling home prices, a downturn in commodity prices, and a slowdown in China.

ECRI’s latest update to the AULLI provides insight into whether Australia’s outlook is as bright as the policymakers think, or if doubts are warranted.

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