The Light Traffic Index (LTI) rose 1.4% in July and is 0.9% higher than a year ago. The more volatile Heavy Traffic Index (HTI) lifted 1.8% in the month, and is up 2.8% y/y.

Light traffic (motorbikes, cars and vans) is generally a good indicator of the state of demand, as opposed to production. It typically provides a six-month lead on momentum in the economy, with variation reflecting discretionary spending on outings, movement of couriers and tradespeople etc. The trend in light traffic has been only very mildly upward over recent months. In per capita terms (using ANZ population forecasts), light traffic is going sideways. 

Heavy traffic data (mostly trucks, but also buses) tends to provide a steer on production GDP in real time, as it captures both goods production and freight associated with both wholesale and retail trade, as well as exports. The HTI rose 1.8% in July but after falls in two of the last three months it’s fallen into a bit of a dip. In Q2, the HTI was down 0.1%, adding to the list of activity indicators suggesting the economy may have shrunk in Q2, but at least Q3 is off to a more positive start.

The index is up 2.8% versus a year ago (three-month average). Note all data are seasonally adjusted.