The renewed strength in the ANZ Truckometer indexes is consistent with the recent rebound in business confidence.
The ANZ says it is now watching the recent about-turn in dairy prices, but warns that these have the potential to dampen spirits again.
However, the non-dairy agriculture, construction, housing, services and tourism sectors continue to perform very well and have the economy back on the ascent and refusing to roll over.
The main risks to this picture of a soft landing are not under New Zealand’s control: the El Nino threat, and the global outlook according to the ANZ.
The Heavy Traffic Index lifted another 0.9% in October, while the Light Traffic Index, which leads growth in the economy by six months, largely held onto September’s 2.6% surge, dipping just 0.3%.
The Heavy Traffic Index suggests that Q3 GDP growth may be in a 0.5-1.0% q/q range, which would be a clear improvement on the lacklustre rates seen in the first half of this year. The strong October result is also a good
start to Q4.
The Light Traffic Index suggests that momentum in the economy should continue into 2016, in the absence of any untoward events.
