Two of the ANZ Truckometer’s economic indicators recovered further in November, continuing on gains seen in October.
Developed by Sharon Zollner, senior economist at ANZ, the Truckometer is based on the monitoring of selected roads for traffic flow, which has proven to be a relatively good indicator of the economic condition of the country.
While the pace of economic growth remains down on the 2.5% seen in the first half of the year, lifts in the heavy and light traffic flow indexes over the last two months suggests an inflection point may have been reached.
Contemporaneous with GDP growth, the heavy index rose 1.4% in November, on top of a 4.4% rise in October.
Zollner says that while the trend remains flat, the data is a welcome break from the lower peaks and trough pattern evident since mid-year.
“While our heavy data suggests a negative third quarter for GDP, a considerably better Q4 is possible,” she says.
The light traffic index rose 0.7% in November on the back of October’s 1.7% increase, suggesting a bumpy road.
“The light data gives a six month lead on GDP growth, but is volatile,” says Zollner.
“In quarterly terms we may be looking at a weak Q3, a better Q4, a weak Q1, a better Q2.
“It’s tempting to downplay the indicator for being so bumpy, but NZ GDP itself can be pretty bumpy too.
“Despite the bounce in October and November, in annual growth terms both the ANZ Light Traffic Index and the ANZ Heavy Traffic Index agree that the economy has lost momentum in recent months.
“The headwinds the economy is facing would make such a slowdown quite understandable. But the recent pick-up in traffic lends support to the assertion that we are not looking at a re-run of 2008.
“In addition, traffic data cannot be expected to pick up the Christchurch rebuild, which anecdotes and increasingly, regional data, suggest is starting to really kick into gear.”
