Australia’s leading index rose in March and continued to suggest above trend growth in 2021, Westpac said Wednesday.

The Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, climbed to 3.29 percent in March from 3 percent in February.

Westpac forecast economic growth of 4.5 percent for 2021. The agency said the reopening of the economy, cashed up households, and an eleven-year high in consumer sentiment all point to strong spending.

Over the last six months, the index growth rate lifted to 3.29 percent in March from -0.24 percent in September.

The main components driving the 3.53 percentage point turnaround have been total hours worked, commodity prices, measured in AUD terms, US industrial production and dwelling approvals, all of which have switched from being negative drags on growth to strong supports.

These improvements have been partially offset by reduced support from smaller contributions from the Westpac-Melbourne Institute Consumer Expectations Index and the Westpac-Melbourne Institute Unemployment Expectations Index.

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