By Poppy Johnston and Kat Wong in Canberra

AUSTRALIA’S economy looks to be leaving the worst behind it as forward-looking indicators point to a rosier 2024, at least in the second half of the year.

A collection of future-focused data points assembled by Westpac and Melbourne Institute recorded a surprise shift into positive territory after a run of 15 months of below trend readings, consistent with an economy slowing in response to rising interest rates and high inflation.

The six-month annualised growth rate in the leading index, which indicates the likely pace of economic activity relative to trend three to nine months in the future, rose to 0.30 per cent in November from a negative 0.39 per cent reading in October.

Westpac senior economist Matthew Hassan said the unexpected jump to an above-trend reading had been spurred by one-off boosts, such as a spike in apartment developments that pushed up dwelling approvals.

He said these temporary boosts would likely drop out of the indicator in coming months.

“The underlying picture is still of an improvement but one that looks to be more consistent with stabilisation than the beginning of a clear cyclical upturn,” Mr Hassan said.

Consumer sentiment and dwelling approvals were not settling at weak levels after sharp falls, but industrial production and labour markets are having a delayed reaction to the tightening cycle.

“And while market measures – the S&P/ASX 200 and the yield spread (and, to some extent, commodity prices) – may be starting to anticipate a policy easing cycle, this effect was fairly muted in November,” Mr Hassan said.

The economy has been slowing, as the September quarter national accounts revealed, with the household sector clearly under pressure from rising mortgage repayments and high living costs.

Mr Hassan said economic weakness was likely to extend into the first half of the year.

This would take pressure off the Reserve Bank’s hiking cycle aimed at still-high inflation, in part driven by firm domestic demand.

“This will make the Board more cautious about any additional interest rate tightening.”

he said.

Consumer spending momentum dropped off again in November, based on an index assembled by Visa Australia for November.

The index, which captures the number of people in spending mode, fell 1.3 points to 90.6, its second lowest level since 2019.

Discretionary, non-discretionary, fuel and restaurant spending was all subdued.

Australians may be tightening their belts but many are still finding room in their household budgets for booze.

A survey of 1000 people by price comparison site Compare the Market found Australians on average spend about $300 on alcoholic drinks every month.

But certain demographics are likely to splash out even more.

For Queenslanders, alcohol spending balloons to $370 a month while millennials spend almost twice as much as average Australians, shelling out $445 per month.

Compare the Market spokesperson Chris Ford says cutting down on alcoholic beverages could supercharge savings during the cost-of-living crisis.

“Simply giving up the drinks for a month could save people almost $300 a month, which can be one or maybe two grocery shops in a month, or even a quarterly electricity bill all done and dusted,” he said.