The ANZ Truckometer light traffic index rose 4.4% month-on-month in February while heavy traffic rose 1.4% m/m.
COVID disruptions are expected to continue to cause volatility in both traffic data and economic activity.
“The disruption from the Omicron outbreak was outweighed by ongoing normalisation following the 2021 lockdown when it came to in traffic flows in February,” ANZ chief economist Sharon Zollner says.
“As long as COVID disruptions continue, traffic flows will be less useful as an economic indicator. Volatility makes it difficult to get a handle on true momentum in the economy.
“The light traffic index typically provides a good indicator of this, with a six-month lead, but we’ll have to wait for people movement to normalise before that will once more be the case.
“Heavy traffic still provides a good contemporaneous indicator of activity. It suggests a solid increase in Q4 GDP following the lockdown-induced 3.7% fall in GDP in Q3, and other indicators have backed that up,” Zollner says
“With two of three months in the March quarter now in, it’s suggesting modest growth in Q1, but given Omicron disruption, the month of March remains a wild card.
“Economic data of all stripes are going to remain volatile for a few months yet. But we expect slower momentum in the economy as both higher inflation and higher interest rates take a toll.
“We are forecasting the RBNZ to hike aggressively, with 50bp hikes in both April and May, despite slowing growth and clear risks of a hard landing.
“With inflation so high and rising, the RBNZ needs to act to reinforce their inflation-targeting credibility, as the cost of losing that would be enormous,” she says.
