The ANZ Truckometer report for July says it expects the official cash rate to be cut again this month, as it says the economy has slowed markedly in recent months.
While the light and heavy traffic indexes reversed their May falls in the month of June, the rebound was welcome says the ANZ truckometer but the trend is still soft.
The ANZ heavy traffic index rose 1.6% in June (seasonally adjusted) but is 1% down in the June quarter. This suggests the economy grew little – and may have even contracted slightly – in Q2.
The ANZ light traffic index gives a 6-month lead on the economy. It rose 0.9% in the month of June (seasonally adjusted) and is flat on a 3-month basis, suggesting it is also losing momentum. The light traffic index is still flagging strong annual growth, but the message from the 3-month trend gives a timelier signal according to the truckometer report.
“It’s clear that the New Zealand economy has slowed markedly in recent months; the rebound in our heavy traffic index is tepid given the rebound followed five months of declines,” says the ANZ truckometer.
“We expect the OCR to be cut again this month.”
