The ANZ Truckometer heavy traffic index flattened right off in August and the fall in log prices may have played a role.
ANZ chief economist Sharon Zollner says “growth in the light traffic index has fallen off its ledge, suggesting that annual GDP growth remains in a trend decline”.
“The level of the heavy traffic index has flattened right off – we suspect the reduction in logging activity due to a sharp price fall was a big contributor.
“It is not sending good signals about Q3 GDP, though there is a month’s data still to come.
“Surveys of businesses including the ANZ Business Outlook, the NZIER Quarterly Survey of Business Opinion, and the Business-NZ PMI have been sending downbeat messages about the near-term outlook for some time.
“This hard data is broadly backing them up, though the fall is so far certainly less extreme than some of the indicators have been showing.
“The Light Traffic Index is at least consistent with positive growth, albeit at modest rates, and suggests that quarterly growth at the end of the year may look a bit better than Q3.
“This would make sense, as a significant easing in monetary conditions has been injected into the economy, via both lower interest rates and the depreciation in the exchange rate,” Zollner says.
