Truckometer - Braking but not broken
Posted: 09-Sep-2021 |
The latest ANZ Truckometer is out and it reports that the Light Traffic Index fell 27.6% in August, while the Heavy Traffic fell 18.1% month on month.
It also goes on to say that the fall in traffic will once more be much larger than the slowdown in actual economic activity during lockdown.
Here we go again. Traffic flows plummeted in the latter half of August as the country was plunged into level 4 lockdown restrictions. Traffic movements will lift outside of Auckland as alert levels ease, but the normal relationship between traffic and economic activity will not be reliable as long as movement restrictions remain in place.
We’re optimistic the economy will bounce out of the lockdown in reasonable shape, albeit again, carrying more debt as fiscal policy steps in to shield household incomes. In a cyclical sense, however, the experience both here and overseas has been that households tend to rush out and shop enthusiastically once restrictions ease. With job security excellent at present, that’s our base case assumption this time too, though a rising interest rate environment provides a very different backdrop for mortgaged household cash-flow.
Compared to level 4 last year, neither light nor heavy traffic fell as much versus year-ago levels. Some of this may reflect people driving to vaccinations and testing, but some of it likely also reflects increased delivery activity. ANZ card spending data has fallen a lot less than it did in level 4 last time, with more essential good suppliers having sorted out online shopping options.