A solid 6.7% bounce in the heavy traffic index in August has put the upward trend in the ANZ Truckometer index back on track.
Despite the New Zealand economy performing well, the ANZ is concerned that higher risk and unsustainable borrowing in precarious offshore markets could adversely affect us.
The light traffic index lifted 1%, remaining steady according to the Bank.
“The bounce-back in the heavy traffic index confirms that we were right not to read too much into the recent pothole,” says ANZ.
“The recent volatility in the index perhaps reflects the fact that parts of the economy, such as construction, are running full speed ahead, while others, such as agriculture, are more of a mixed bag,” says ANZ.
“The New Zealand economy is putting in a good performance, but it is fair to say growth in recent times has become more reliant on increased borrowing and population growth,” says the bank.
“The Reserve Bank is already attempting to slow the former – despite OCR cuts working in the other direction – and the latter is increasingly a political football,” says ANZ.
“But as has been the case for some time, our main concerns relate to the arguably precarious situation offshore, with unsustainable borrowing and risk-taking having raised the stakes in global financial markets,” it says.
“An side-swipe typically ends the New Zealand economy’s stellar runs,” warns the ANZ. “Stay alerted,” it advises.
