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.
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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.