This is not the same as saying the end of the good times is nigh. In ANZ’s view an easing in growth wouldn’t be surprising or alarming – the economy is hitting speed limits with regard to labour supply and credit growth.
In fact, it might be wise to ease off the accelerator for a while if a boom/bust scenario is to be avoided.
Households are vital to determining which path the economy goes down. In that light, the negative surprise in December card spending suggests a bit more restraint is being exercised than is typically seen during periods of strong house-price growth (like New Zealand has recently experienced).
It’s a bit tough on retailers in the near term, who may be disappointed with their Christmas takings, but steady-as-she-goes is in everyone’s interests in the longer run.
The ANZ Heavy Traffic Index comprises flows of vehicles weighing more than 3.5 tonnes (primarily trucks) on 11 selected roads around NZ. It is contemporaneous with GDP growth.
Sharon Zollner is an Associate Director & Senior Economist, ANZ NZ