Traffic data points to August slowdown in economic activity

Traffic volumes took a hit in August. Photo / Jason Oxenham

Traffic volumes took a hit in August, reflecting lockdown measures to control the spread Covid-19, ANZ's monthly Truckometer index shows.

"The catch-up overshoot evident in traffic data in July came to an abrupt end in August, as Auckland went into alert level 3 lockdown and the rest of the country went into level 2 in the middle of the month," said ANZ chief economist Sharon Zollner.

The Light Traffic Index fell 13.1 per cent in August, while the Heavy Traffic fell 6.5 per cent as the impact of the second Covid-19 outbreak weighed, including the roadblocks around Auckland.

"The different restrictions across regions and the roadblocks in and out of Auckland (traffic over the Bombay Hills halved) mean there's going to be significantly more 'noise' in the traffic data this month than in actual economic activity," Zollner said.

"That said, it certainly does represent real disruption."

"Last time, coming out of lockdown, there had been a rapid bounce-back in activity (including traffic) and sentiment – though both business and household sentiment remained severely dented compared to pre-Covid days.

"The ANZ Business Outlook for August held up remarkably well in the face of the return of Covid, in that the data didn't slip much from the preliminary read, though sentiment and activity indicators in Auckland were understandably weaker than elsewhere. Later today we will release the preliminary data for September.

"The New Zealand economy is demonstrating real resilience, and that's great, but the fact remains that we are still in the 'skirmish' stage of the war against Covid-19.

"The pain from the closed border would take time to filter through due to both the seasonality of tourism and the considerable lag between net migration and its economic impacts," Zollner said.

"And fiscal life support is yet to be pulled."