ANZ’s Truckometer indices lifted in May, returning to an upward trend in a sign the New Zealand economy still has plenty of momentum.
The result may indicate a slightly patchier growth outlook for later in 2017 as capacity and credit constraints become more binding but the short-term news is positive.
The ANZ Heavy Traffic Index jumped 4.1 per cent, seasonally adjusted, up a decent 1.8 per cent in the quarter. The reading is consistent with ANZ’s preliminary forecast of economic growth of between 0.5 per cent and 1 per cent.
“The upward trend in the index is looking solid at this stage boding well for further growth in the second quarter.” - Sharon Zollner
The upward trend in the index is looking solid at this stage boding well for further growth in the second quarter.
The strong May increase suggests ANZ was probably right in suspecting dire weather played a role in April’s 2.1 per cent fall.
ANZ’s Light-Traffic Index rose 1.2 per cent in May, seasonally adjusted. This index gives a six-month lead on the direction of the economy and is best interpreted as a measure of momentum.
The previously very strong upward trend in the LTI has had a few wobbles this year, consistent with ANZ’s view the low-hanging fruit has already been picked in this economic cycle.
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.
31 Mar 2017
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