ANZ’s Heavy Traffic Index rose 1.6% in June but ended up down 1% for the June quarter, which suggests Gross Domestic Product (GDP) growth will be weak or possibly even negative, towards the end of the year, according to the bank’s Truckometer report.
The Index measures the traffic of vehicles weighing more than 3.5 tonnes at various points around the country and is regarded as an early predictor of movements in GDP.
ANZ also produces a Light Traffic Index which tracks flows of smaller vehicles, mainly cars and vans, at selected points around the country.
It rose by 0.9% in June but was up just 0.1% in the June quarter compared to the previous quarter, which also suggested a flattening of the economy, the bank said in the Truckometer report
And while the rebound in both indices in June was welcome, the overall trend remained soft and the 1% decline in the Heavy Traffic Index suggested the economy grew little and may have even contracted slightly in the June Quarter, the report said.
That is a concern because if the GDP figures eventually mirror that trend and show a decline, and then decline again for a second successive quarter, the country will officially be in recession.
“It’s encouraging to see a rebound in traffic flows over June,” ANZ said in the report.
“However , it’s clear that the New Zealand economy has slowed markedly in recent months; the rebound in our Heavy Traffic Index is tepid given the it followed five months of declines.
“We expect the OCR to be cut again this month.”
You can read the full Truckometer report here:
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