Truckometer - STOP
Posted: 12-May-2020 |
According to the latest ANZ Truckometer report, the Light Traffic Index fell 71.1% month on month in April, while the Heavy Traffic fell 45.0% month on month. The month included 27 days of Level 4 lockdown and 3 days of Level 3. They say that this will mark the low point, with both heavy and light traffic seeing a big step up as a result of the move to Level 3, and another jump expected for Level 2. Heavy traffic is likely to be the better GDP indicator through this period.
The two ANZ Truckometer indexes usually reflect economic activity. The Light Traffic Index gives an indication of where GDP growth is headed in six months' time, while the Heavy Traffic Index is real-time. However, in times of lockdown, the usual correlation between traffic and GDP growth will not hold. This is particularly true of light (car) traffic, given work-from-home arrangements. The correlation between heavy traffic and GDP is likely to be more robust through this period, but is not 1:1.
The report goes on to say that the Heavy Traffic data suggests a sharp drop in quarterly GDP growth in Q1, but the big hit is coming in Q2. ANZ has pencilled in a quarterly fall of around 20%, with the economy still down 8-10% by the end of the year.
This current report has calculated how traffic changed in the different levels of lockdown. Behaviour started to change even before the Level 4 lockdown was imposed. In Level 4, weekday heavy traffic was just 48% of what it was a year earlier, while during the weekends, it was 36%. In Level 3, this stepped up significantly to nearly 78% and 62%. Light traffic took an even bigger hit. Weekday car traffic was just 21% of year-earlier levels in level 4, and 13% in weekends. This bounced to 54% and 36% under Level 3.
Forecasting ahead, ANZ says that next month we will be able to fine-tune these estimates and give preliminary results for what Level 2 brings.