ANZ Truckometer shows traffic flows easing as economy cools

Traffic volume data suggests the economy is slowing. Photo / George Novak

Traffic volume data suggests the economy is slowing, although whether that points to recession or just post-Covid normalisation, is not yet clear ANZ chief economist Sharon Zollner says.

The ANZ Truckometer survey showed the Heavy Traffic Index lifted 0.8 per cent in January, while the Light Traffic Index fell 0.7 per cent.

But both fell across the fourth quarter of 2022 with Heavy Traffic down fell 1.5 per cent and Ligh Traffic down one per cent (quarter on quarter).

“On the face of it, the quarterly weakness in both the HTI and LTI suggests a risk GDP growth could come in negative in Q4, compared to our forecast for a 0.3 per cent lift,” Zollner said.

ANZ currently forecasts New Zealand’s economy will continue to slow into a shallow recession by the second quarter of this year.

The latest traffic data suggested some “downside risk” to those forecasts.

What was clear was that both indexes had dropped back to trend after a period of outperformance last year, Zollner said.

Traffic data did better than many other economic indicators through the Covid period, as it captured supply disruptions as well as changes in demand, she said.

“Supply disruptions certainly still exist [the Auckland floods being the latest], but the situation is pivoting towards demand being the primary determinant of the level of activity the more normal state of affairs.”

Variation in light traffic (motorbikes, cars and vans) is generally a good indicator of consumers’ willingness to spend, as opposed to production.

“Lockdowns have meant the usual 6-month lead to GDP doesn’t hold, but light traffic is currently returning to trend after a period of unusual strength,” Zollner said.

“This is consistent with the recent slowdown in retail indicators. Heavy Traffic tends to provide a better steer on production GDP. It has also dipped on a quarterly basis.”

However, Zollner warned that some changes in the collection of traffic data might be causing delays and making the data subject to revision.