The ANZ Truckometer Light Traffic Index fell 0.6% month-on-month in December while the Heavy Traffic rose 0.4% m/m.
The Heavy Traffic Index was still 5.4% higher than a year earlier (3-month average), but the overshoot has faded from three months ago, when it was up nearly 10% y/y.
“Through the crazy volatility of last year, the Heavy Traffic Index has done a good job of matching the contours of quarterly changes in GDP,” ANZ chief economist Sharon Zollner says.
“For the December quarter as a whole, the Heavy Traffic Index fell 2.6%. This is consistent with our forecast of a mild fall in GDP following the massive Q3 bounce – a breather after the huge Q3 bounce, rather than anything alarming in and of itself.
“The Light Traffic Index was still 7.6% higher than a year ago in the final three months of the year – no mean feat given the lack of tourists. The first three months of the year are the peak for international tourism – we are likely to see a greater impact then.
“However, given the tourism hit will be felt primarily in Q1, it does suggest we are likely to see a technical recession over Q4/Q1, i.e., two consecutive quarterly falls in GDP. If we don’t, it’s likely to be due to the strength we are seeing in housing and construction.
“There are real question marks over the sustainability of that, but for now, it’s providing an offset to the hole international tourists are leaving,” Zollner says.
