<\/p>\n
\nState Highway 16 full of slow moving morning traffic as the sun rises.
\nPhoto: RNZ \/ Cole Eastham-Farrelly\n<\/p>\n
New data suggests the economy kept its head above water in March – but storm clouds may be gathering.<\/p>\n
The latest ANZ Truckometer shows the heavy traffic index, a real\u2011time measure of economic activity, rose by 0.4 percent in March and it remains 2.3 percent higher than a year ago.<\/p>\n
However, the light traffic index, which points to future activity and spending, fell by 2.4 percent in March – although it is still 3.6 percent higher than a year ago.<\/p>\n
The light traffic index, which covers motorbikes, cars and vans, is regarded as a good indicator of the state of demand, as opposed to production, and typically provides up to a six-month lead on momentum in the economy.<\/p>\n
ANZ chief economist Sharon\u202fZollner said the fall in light traffic was not unusually large – coming off a strong lift in February – but may reflect people driving less as fuel prices rose in March.<\/p>\n
“I think it’s reasonable to say that has been looking like a pretty good upward trend in the light traffic index has been challenged,” she said.<\/p>\n
“It is possible this partly reflects people driving less in response to higher fuel prices, and it will be very interesting to see where it goes in the next month or two.”<\/p>\n
Zollner said the weaker light traffic reading also aligned with slowdowns seen in both ANZ’s card spending data in March and its consumer confidence index.<\/p>\n
“Although it’s not causal – the economy won’t be weaker simply because people are driving less – it could be that the correlation still holds, and that a decline in driving now points to pressure on the economy over the next six months or so,” she said.<\/p>\n
However, Zollner also cautioned the March result could simply reflect a correction after February’s strong readings, and warned against reading too much into a single month’s data.<\/p>\n