Westpac-MI Leading Index Bulletin

Latest edition · August 26, 2026

er20260826BullLeadingIndex

The Westpac-Melbourne Institute Leading Index growth rate improved to -0.2% in July 2026 from -0.4% in June, indicating Australian economic growth remains sub-trend but not severely weak. GDP growth is projected to remain positive overall while tracking close to flat per capita, supporting a continued RBA cash rate hold in September.

The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index increased to -0.2% in July from -0.4% in June, marking the seventh consecutive month of below-trend readings. The modest drag is driven primarily by financial conditions (yield spread compression) and labour market indicators, while US industrial production and Australian dwelling approvals provided slight positive support. With the RBA shifting to a 'hawkish hold' posture, the mechanical drag from yield spreads is waning, pointing to an economy characterized by soft growth and underlying resilience rather than sharp deterioration. Westpac expects the RBA to keep the cash rate unchanged at its September 28–29 meeting.

Key takeaways from the latest edition

• 1.The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index lifted to -0.2% in July from -0.4% in June, marking the seventh consecutive month of below-trend growth.
• 2.Economic momentum remains soft but not particularly weak; overall GDP growth is expected to remain positive in upcoming quarters, though close to flat in per capita terms.
• 3.The primary drag on the index stems from financial conditions (yield spread narrowing due to prior RBA tightening) and the labour market, offset partially by US industrial production and dwelling approvals.

What this series covers

• Key points
• Westpac-MI Leading Index
• Leading Index suggests growth a little less sluggish
• Corporate Directory
• DISCLAIMER

Edition archive

• er20260826BullLeadingIndex

  August 26, 2026

• er20260421BullLeadingIndex

  July 22, 2026

• er20260617BullLeadingIndex

  June 17, 2026