‘Not capitulating’: ANZ Truckometer shows economy resilient

ANZ's Truckometer slowed down last month after rising in August. Photo / Thinkstock

ANZ’s Truckometer, a monthly measure of traffic flow, suggests the economy remains resilient despite the headwinds of higher interest rates.

The index measures relative rises and falls in car, motorbikes and truck traffic to offer early clues to the scale of activity in the economy.

The Light Traffic Index fell 1.3 per cent in September, while the Heavy Traffic Index fell 3.5 per cent, the Truckometer showed.

But both were coming off decent lifts the previous month, said chief economist Sharon Zollner.

Despite easing slightly in September, the light traffic index had maintained its mild upward trend, she said.

“Given current strong growth in the population via immigration, an upward trend is to be expected. However, the data remains considerably more volatile than pre-Covid.”

The Light Traffic Index successfully picked that second-quarter GDP wasn’t going to be weak, and was suggesting that the third quarter may also have some life in it, Zollner said.

Heavy traffic data tended to provide a good steer on production GDP, but had been volatile recently.

“Smoothing through the noise, the three-month average is nothing flash, sending a weaker signal for [the third quarter] than the light traffic is,” she said.

“The data reflects that the New Zealand economy is patchy as the cost of living and tighter monetary policy bites. But it’s not capitulating.”

Tourism was rebounding, and the housing market was getting a second wind, Zollner said.

ANZ chief economist Sharon Zollner.

“Fiscal policy is stimulatory and population growth is strong. Even in the under-pressure agriculture sector, there has been some good news, with dairy prices rising in the last four GlobalDairyTrade auctions.”

It remained unclear whether this overall gentle economic slowdown is going to get more severe – and if not, whether it will be enough to bring inflation sustainably down to target, she said.