Signals from the ANZ Truckometer reflect a New Zealand economy facing strengthening headwinds.
It says until global dairy prices find a floor ( and broader commodity prices too – as a bellwether of China’s economic health) all economic forecasts remain a moving target.
“With business confidence now in retreat and dairy prices yet to find a floor, we expect further cuts in the official cash rate,” says the ANZ.
The ANZ heavy traffic index fell 0.3% in July, and is down 0.2% in on a 3 month/3 month basis (seasonally adjusted). It has now receded six months out of the last seven, which says a clear slowdown is apparent.
The heavy traffic index suggests a weak GDP growth outturn in quarter two, and a fairly flat July is not a great start to the third quarter says ANZ.
The ANZ light traffic index leads GDP by six months. It fell 0.2% in July. It is flat in the last three months versus the previous three months, marking the end of a strong trend. While the light traffic index is more upbeat about near-term growth, it is also loosing steam.
