23 Mar 2023

Easing heavy traffic points to flat first quarter for economy

3:49 pm on 23 March 2023
Trucks on highway.

The Heavy Traffic Index in ANZ's Truckometer survey fell 0.7 percent for the month, giving an annual growth rate of 1.3 percent. (file image) Photo: 123RF

An easing in heavy traffic levels is pointing to a relatively flat first quarter of the year for the economy.

The ANZ Truckometer survey showed the Light Traffic Index (LTI), which looks at the medium term and is regarded as a measure of consumers' willingness to spend, increased 2.9 percent in February - the first lift since September last year.

However, the Heavy Traffic Index (HTI), a pointer for current activity and production, fell 0.7 percent for the month, giving an annual growth rate of 1.3 percent.

ANZ chief economist Sharon Zollner said flood damage in the North Island was still affecting traffic data and supply chains, but the data was consistent with the slowdown in retail spending observed over the past few months.

"The heavy traffic index does a pretty good job of suggesting where GDP is going to go," Zollner said.

"It correctly picked that the last three months of last year were going to be negative and so far it's suggesting a pretty flat quarter to start this year, which is consistent with our forecasts."

The bank was forecasting a 0.2 percent increase in GDP in the first quarter of this year, but weather-related noise would inevitably affect this, Zollner said.

"Over time, both the economy and traffic data should revert to the more normal state of affairs, of economic activity primarily reflecting the state of demand, but we're not there yet," she said.

"Caution is appropriate when interpreting the data as a gauge of the effects."

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