Truckometer data points to rising fuel costs keeping more drivers off the road

Source: Radio New Zealand

The rising cost of fuel appears to keeping more drivers off the road, with light traffic down 1.7 percent last month, though still up on the year earlier by 2.4 percent.

The latest ANZ Truckometer shows the heavy traffic index – a real-time measure of economic activity – was holding up a bit better with a drop of 1.2 percent in April over March, but was still trending higher with a 2.6 percent year-on-year rise.

ANZ chief economist Sharon Zollner said the light traffic index tends to be a predictor of economic activity six months ahead, though the fuel crisis had created some uncertainty about the outlook.

“Higher fuel prices is bad for activity more generally. It’s not just about driving less, it’s about people shopping less as well,” she said.

“We can certainly see that in our card spending pack, and we’ve also seen a sharp drop in business and consumer confidence. So it’s obviously going to reduce driving, but it’s reducing broader economic activity as well,” she said.

Zollner said the heavy traffic was still holding up quite well, with support from the agriculture, construction and manufacturing sectors.

However, she said the activity could be a sign of some stockpiling of critical goods, as businesses may be concerned about the potential for supply chain disruptions, as seen during the Covid pandemic.

“There’s a lot of talk about how this isn’t just fuel, it’s plastics and other chemical inputs as well.

“So maybe there’s a bit of front loading going on, but the anecdote would certainly suggest that the economy is taking quite a hit in terms of activity. So it wouldn’t be surprising to see that start to turn-up in the heavy data. But for now, it’s holding up.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand