The ANZ Truckometer light traffic index lifted 0.9% month-on-month in January while heavy traffic fell 0.5% m/m.
The lift in light traffic follows a 16% bounce in December as the Auckland border reopened while heavy traffic eased.
It’s expected COVID disruptions are likely to continue to cause volatility in both traffic data and economic activity.
ANZ chief economist Sharon Zollner says January brought “relatively steady traffic flows” versus December.
“The heavy traffic index has largely made back its Delta fall, while light traffic hasn’t yet, sitting around 2018-19 levels.
“COVID restrictions including regional boundaries have lessened the usefulness of light traffic in particular as an economic indicator.
“The looming Omicron outbreak is likely to disrupt things further. The heavy traffic index may be more a reflection of infection levels amongst truck drivers than anything else over the next couple of months.
“As for the light traffic index, its six-month lead on the economy has been battered by lockdowns.
“Heavy traffic has been the more useful indicator recently. It suggests a solid increase in Q4 GDP following the lockdown-induced 3.7% fall in GDP in Q3.
“Both traffic and other economic data are going to remain volatile for a few months yet. Overall, we expect a slower pace of growth as consumers battle higher interest rates and a sharply higher cost of living, against the backdrop of a retreating housing market.
“But getting the economy back on a more sustainable path is important. The risk is that the RBNZ oversteers on the tightening front, given the lags with which monetary policy influences activity and eventually inflation.
“With inflation pressures looking extreme, it would take quite a lot to deter further hikes. Over the near term, Omicron will take centre stage.
“But beyond that, we think rate hikes have the greater chance of derailing economic momentum in time,” Zollner says.
