Pointing to a gradual recovery, an Australian leading economic index struck a 30-month high in January, reported the bank Westpac on Wednesday.

The Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, lifted to 0.58% in January from 0.24% in December 2024, said Westpac.

Notably, all eight subcomponents of the Leading Index in January contributed positively to the six-month annualized growth rate, "the first time we have seen a consistent above-trend signal since June 2021," said Westpac.

Among the subcomponents, the commodity prices index largely stabilized in January, of importance to Australia's somewhat resource-dependent economy, noted Westpac.

Also improved in January were consumer unemployment expectations, dwelling approvals (residential building permits) and "a widening yield spread, a signal that broadly implies financial markets expect activity to pick up," said Westpac.

A rising domestic stock market "has also contributed positively," added Westpac.

The above-trend momentum on the leading economic index "is becoming more convincing," said Westpac.

However, the index still points to a "gradual recovery rather than a sudden surge," said the bank.

Westpac noted that the Reserve Bank of Australia (RBA) next meets on March 31-April 1. While the central bank cut rates at its recent policy session, "the case is unlikely to be convincing enough for the RBA Board to move (cut) again at its next meeting," advised Westpac.