Truckometer buoyed by strong dairy activity
The latest ANZ truckometer jumped 3.3% in May, reflecting strong economic activity.
The truckometer uses traffic volume data published by the New Zealand Transport Agency, and matches the data from selected roads to GDP growth six months later.
ANZ senior economist Sharon Zollner, who designed the truckometer, says it essentially predicts what economic activity will be like in six months.
However, last month's results seem to be an anomaly and may reflect current economic conditions rather than predict activity in the fourth quarter.
A distinction is made in the truckometer between heavy trucks and light vehicles.
Heavy trucks are generally an indicator of current activity because they are moving produce, while light vehicle movements predict future growth because they are an indicator of confidence.
Ms Zollner told NBR ONLINE most of the strength seen in May was on roads with a lot of heavy traffic activity.
"Most of those roads were near dairy factories. So putting that together with anecdotal evidence of a very strong end to the dairy season, we think that probably is what was behind it."
She says the data probably reflects real economic activity happening now, rather than what can be expected in the fourth quarter.
"That is still good news, particularly since the truckometer at the end of last year was looking quite weak, suggesting that Q2 could even be negative."
There was also a lift in light traffic in May, which the truckometer attributes to an especially warm month.