Source: Radio New Zealand
State Highway 16 full of slow moving morning traffic as the sun rises. RNZ / Cole Eastham-Farrelly
New data suggests the economy kept its head above water in March – but storm clouds may be gathering.
The latest ANZ Truckometer shows the heavy traffic index, a real‑time measure of economic activity, rose by 0.4 percent in March and it remains 2.3 percent higher than a year ago.
However, the light traffic index, which points to future activity and spending, fell by 2.4 percent in March – although it is still 3.6 percent higher than a year ago.
The light traffic index, which covers motorbikes, cars and vans, is regarded as a good indicator of the state of demand, as opposed to production, and typically provides up to a six-month lead on momentum in the economy.
ANZ chief economist Sharon Zollner said the fall in light traffic was not unusually large – coming off a strong lift in February – but may reflect people driving less as fuel prices rose in March.
“I think it’s reasonable to say that has been looking like a pretty good upward trend in the light traffic index has been challenged,” she said.
“It is possible this partly reflects people driving less in response to higher fuel prices, and it will be very interesting to see where it goes in the next month or two.”
Zollner said the weaker light traffic reading also aligned with slowdowns seen in both ANZ’s card spending data in March and its consumer confidence index.
“Although it’s not causal – the economy won’t be weaker simply because people are driving less – it could be that the correlation still holds, and that a decline in driving now points to pressure on the economy over the next six months or so,” she said.
However, Zollner also cautioned the March result could simply reflect a correction after February’s strong readings, and warned against reading too much into a single month’s data.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
