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