ANZ's Truckometer indicates there is still plenty of gas left in the New Zealand economy’s tank despite both heavy and light traffic indexes falling in the second quarter.
The latest Truckometer indexes have revealed a 0.8% and 0.7% drop in the heavy and light traffic indexes respectively.
These results in the second quarter may appear to be relatively disappointing when compared to present strong outturns.
The heavy traffic index – which runs contemporaneously with GDP - was accurate in picking first quarter growth of 1% and suggested a growth rate of around half that in the second quarter.
ANZ says in the context of an economy which has grown more than 3% in the space of just nine months, a 0.5% growth in the second quarter would be respectable.
The question is, has New Zealand just shifted down a gear or hit the brakes?
The heavy traffic index suggests annual GDP growth may be close to topping out.
ANZ still suggests a growth rate of around 3% which it believes is probably a top-side of the range of plausible estimates for New Zealand’s potential growth rate at present.
This could be welcome news to the Reserve Bank however, as they would be glad to see growth slow towards a more sustainable rate as opposed to a ‘boom-bust’ dynamic, the report says.
ANZ reports its light traffic index – which gives a six-month lead to GDP outturns - has fallen for the first time in four months, with only one of 10 roads showing a volume rise.
However it suggested a pick-up in momentum thereafter and in term of annual growth rates, the index’s trajectory suggests there may be a little upside in the annual GDP growth yet.
Anecdotes suggest the forestry sector activity is slowing down rapidly and ANZ says this is consistent with what can be seen in the heavy traffic data on individual roads.
Looking ahead, trends in commodity prices and global developments will play a key role in whether the economy drives on, or parks up for a bit, the report says.
Jason Walls is an AUT journalism student