The ANZ Truckometer heavy and light traffic indexes dropped in February as the coronavirus (Covid-19) outbreak hit economic activity.
The light traffic index was down 0.7% m/m while the heavy traffic index was down 3% m/m after a sharp lift the previous months.
ANZ chief economist Sharon Zollner says the moves in February “were not unusually large” and indicate that activity remained largely business as usual around the country.
“The alarming spread of Covid-19 globally, and the impending policy response, have now made any economic forecasts highly uncertain.
“Given the suddenness of the Covid-19 shock to the economy, we cannot expect that the light traffic index’s usual six-month lead on economic growth will hold this year.
“However, the data does show that the economy had decent momentum going in, which is helpful,” Zollner says.
“Although the overall heavy traffic index fell 3%, there were more marked falls in areas where logging trucks are a larger proportion of heavy traffic.
“Through Te Puna, west of Tauranga Port, both light and heavy traffic fell sharply.
“The charts against GDP look alarming, but the impact on the broader economy will be overstated due to the oversized impact of the abrupt forestry slowdown in this region.
“The indexes therefore shouldn’t be taken at face value as GDP indicators, given the unusual nature of developments, which are much more complicated than a cyclical demand slowdown.
“They do, however, give an indication of how dramatic the impact of the trouble in China’s logistics chain has been on New Zealand primary producers.
“We will continue to pay close attention to traffic data as a timely indicator of both production (heavy traffic) and on how New Zealanders are changing their behaviour in response to the Covid-19 threat (light traffic),” Zollner says.
