Has my Oz leading index bottomed?

 I haven't calculated my Ozzie coinciding and leading indices for 3 years.  I had a few personal issues, and just updated the bare basics of my data banks.  But I have at last updated all (more or less) of the time series in my Australia collection, and so I can run my programs to calculate my indices.

First, my coinciding index.  This is designed to track the business cycle.  In a commodity-exporting economy, GDE (Gross Domestic Expenditure) is often a better guide to the state of the economy than GDP, and it's certainly more amenable to policy.  The RBA and the government can influence domestic demand, but they have little power over exports.   (GDE= GDP - exports + imports.)

The chart below shows the de-trended average for GDP and GDE and for my coinciding index.  Both are extreme-adjusted, to help minimise the impact of the Covid crash.  However, as with other economies, the downward spike in early 2020 and the rebound spike in 2021 have been muted, not eliminated.  Note that there was a second covid lockdown in 2021.

I haven't yet determined the dates of the Covid recession, as I need to look at individual time series to pin them down, but you can imagine there's a yellow bar showing a recession starting early in 2020 and ending more or less in mid-2020.

Why do I use my coinciding index as cycle referent, instead of GDE?  Because of the lags involved in quarterly data.  The national accounts are available only until Q1 2023; my coinciding index is calculated until June 2023, and I'll be able to make estimates for July in just a couple of weeks.  (The coinciding and leading indices do not contain quarterly time series)

OK, assuming we accept that my Oz coinciding index is a good guide to the cycle, then we can compare it with my leading index, using my coinciding index as the cycle referent.

I've shown the first chart over a long time period to show that my leading index has a consistent lead of around 6 months to the cycle.  Again, note the distortions in the data caused by Covid.  This chart and the one below it show year-on-year changes, not de-trended data.

This is what it looks like over a shorter period:

The key take-aways from this analysis are:

1.  My Oz coinciding index correlates well with the cycle
2.  My Oz leading index leads the cycle by ±6 months
3.  It has started to turn up, suggesting that the Australian recession will be short and that the economy will be expanding again by end-year.
4. However, the recession will likely be deep, if the leading index is any guide.

I'll do some more work to see just how deep, over the next few days.