According to the latest ‘Truckometer’, the Light Traffic Index (LTI) rose 0.6% m/m in August, while the Heavy Traffic Index (HTI) fell 0.7%. Heavy traffic has fallen by 3.3% y/y, a much larger fall than the 1.1% annual fall seen in light traffic.

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 – variation reflects discretionary spending on outings, movement of couriers and tradespeople etc. The trend in light traffic is flat, matching overall economic activity as measured by GDP, but down in per capita terms (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 and freight associated with both wholesale and retail trade. The heavy traffic index fell 0.7% in August and is 3.3% lower than a year ago (three-month average), while light traffic is 1.1% lower. The overall signal regarding economic activity remains weak. Note that all data are seasonally adjusted. In raw terms, heavy traffic remains very low.