There is still plenty of gas in the NZ economy’s tank says the ANZ Truckometer report for May.
ANZ says the heavy traffic index fell 2.1% in May (seasonally adjusted), but the bank says it can still discern an upward trend in the index amongst monthly volatility.
Flows of heavy traffic on seven of the 11 roads used to construct the index fell during May (SA).
The light traffic index, however, rose 0.2% in May, its third consecutive lift. With its six month lead on GDP it suggests that economic momentum will continue.
ANZ says both of the Truckometer indexes suggest the economy will keep rolling on into the second half of the year.
ANZ says the Heavy Traffic Index suggests that annual GDP growth may experience one more decent lift towards 4% but will then start to ease.
But even 3% growth would make New Zealand the envy of other nations and ANZ says it’s probably about all the economy can manage on a sustainable basis.
“It’s a case of slow down for the turn of risk sliding into the hay bales.”
ANZ says the lead to GDP provided by light traffic flows is more surprising.
It would appear that willingness to buy and drive a car is the ultimate measure of “money-where-your-mouth-is” consumer confidence.
This confidence, or lack of it, says ANZ, is reflected in other spending, hiring, and investment decisions that are ultimately captured in production GDP six months later.
