According to the latest Truckometer report, the Light Traffic Index (LTI) fell 0.4% m/m in May, while the Heavy Traffic Index (HTI) fell 2.3% month on month.

Light traffic (motorbikes, cars and vans) is generally a good indicator of the state of demand, as opposed to production. In the absence of sudden shocks, the light traffic data provides a 6-month lead on momentum in the economy – variation in it reflects discretionary spending on outings, movement in courier and tradespeople, etc.

The trend in light traffic is fairly flat, as is economic activity as measured by GDP, but the trend remains downward in per capita terms (using ANZ population forecasts).

Heavy traffic data (mostly trucks) tends to provide a good steer on production GDP in real time, as it captures both goods production (including agriculture) and freight associated with both wholesale and retail trade. It suggests positive GDP growth in Q1 but hasn’t had a great track record of picking GDP lately. 

The heavy traffic index is 1.8% higher than a year ago (using a three-month average to smooth out volatility), while light traffic is up 1.3%. Neither has kept up with recent population growth.