Heavy traffic detour for NZ truckometer

An abrupt 5.7 per cent fall in ANZ’s Heavy Traffic Index in July runs counter to almost all other economic indicators and anecdotes, warning an economic slowdown may loom.

The Heavy Traffic Index was already suggesting weaker economic growth in the June quarter than was seen in the March period. The sharp fall in July represents a poor start to Q3, though it is only one month of three.

" Mid-winter is the trough for raw truck movements and timing/weather effects could be at play."
Sharon Zollner, Associate Director & Senior Economist, ANZ

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Given the weight of other positive evidence regarding the state of the economy, ANZ Research is not reading too much into the turn in the index at present.

Mid-winter is the trough for raw truck movements and timing/weather effects could be at play. Indeed, the data are volatile and a solid bounce-back in August seems the most likely outcome.

However, it is worth noting due to its timeliness the Heavy Traffic Index would be expected to be out of synch with other indicators precisely at turning points. But if August doesn’t bring the expected solid bounce-back we’ll start to wonder what’s going on under the hood of this economy.


What is the ANZ Truckometer?

Sharon Zollner is an Associate Director & Senior Economist at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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