The ANZ Truckometer reports that both the heavy traffic index and the light traffic index fell in May.
“We must be wary of reading too much into one month of data, particularly given extreme volatility of late, but it is probably fair to say the upward trend is no longer as conclusive as it was,” says ANZ.
The Heavy Traffic Index fell 1.7% (+0.6% 3m/3m) in May, while the Light Traffic Index, which leads growth in the economy by six months, fell 1.3% (+1.3% 3m/3m).
“Two consecutive falls so far in Q2 in the Heavy Traffic Index do not, on the face of it, bode particularly well for economic activity in the current quarter,” says ANZ.
“The high upward trend in the Light Traffic Index appears to have turned. This trend bears watching too, though it is worth noting that the levels and annual growth in the index remain adamant, reflecting a period of surprisingly strong momentum in the economy,” it says.
“The Light Traffic Index gives a 6-month lead on the economy and is best interpreted as a measure of energy. It fell 1.3% in May (seasonally adjusted). The recent rise in petrol prices may be a contributing factor,” says ANZ.
“The index has had an adamant upward trend in recent years, so a pause for breath is not alarming. However, we will keep an eye on it as a ‘money where your mouth is’ measure of consumer confidence,” it says.
“The New Zealand economy has put in a resilient performance in the face of challenges to the dairy sector in particular. Confidence surveys and spending have held up remarkably well,” says ANZ.
“However, growth fuelled by debt is less sustainable than that backed by robust income growth. We will be watching our forward indicators such as the Truckometer carefully for any sign the economy may be slowing for a turn,” says ANZ.
