Easing traffic congestion sees economic growth flatten out in Q1

A massive drop in traffic points to a relatively flat economy in the first quarter of this year.

Over the medium term, the Light Traffic Index (LTI), considered a measure of consumer confidence to spend, increased 2.9% in February, according to ANZ Truckometer research. This is the first increase since September last year.

However, the Traffic Index (HTI), a measure of current activity and production, decreased by 0.7% over the month, resulting in an annual growth rate of 1.3%.

ANZ chief economist Sharon Zollner said the North Island flood damage is still impacting transportation data and supply chains, but the data is consistent with the slowdown in retail spending observed in the past few months. rice field.

“The high-traffic indicator does a very good job of suggesting where GDP is going,” Zollner said.

“We rightly chose to have negative last three months last year, and so far this year suggests we are starting a fairly flat quarter, which is in line with our expectations.”

The bank had expected GDP to grow by 0.2% in the first quarter of this year, but weather-related noise will inevitably affect this, Zollner said.

“Over time, both economic and traffic data should return to a more normal state of economic activity that primarily reflects demand conditions, but we are not there yet,” she said. I was.

“Care should be taken when interpreting the data as a measure of effect.”