The Westpac–Melbourne Institute Leading Index six-month annualised growth rate fell to -0.08% in May from 0.19% in April, marking its first below-trend reading since September 2024.

• Domestic drags now outweigh external ones, led by declining dwelling approvals (-0.21 ppts) and slower growth in hours worked (-0.13 ppts).
• Consumer sentiment and unemployment expectations also subtracted a combined -0.24 ppts from the index.
• Financial markets contributed negatively, with the S&P/ASX200 subtracting -0.16 ppts, though some improvement is expected near term.
• US industrial production was the main positive, adding 0.29 ppts, though future gains are likely capped by global trade frictions.
• Westpac forecasts GDP growth of 1.7% YoY by end-2025 and expects the RBA to hold rates in July before a possible cut in August.