The Light Traffic Index (LTI) fell 1.2% in August and is down 0.7% compared to a year ago. The Heavy Traffic Index (HTI) fell 2.2% in the month as the lift off the winter low was smaller than normal, but it is still up 1.3% y/y. The data are seasonally adjusted.

Light traffic (motorbikes, cars and vans) is generally a good indicator of the state of demand, as opposed to production. It typically provides up to a six-month lead on momentum in the economy, with variation reflecting discretionary spending on outings, movement of couriers and tradespeople etc. Light traffic has been noticeably lower in recent months, likely reflecting people choosing to drive less as a result of higher fuel prices. In August, the index fell 1.2%. Like the weakness in ANZ card spending, it may be partly weather related, but we’ll have to wait and see if it bounces back in September. 

Heavy traffic data (mostly trucks, but also buses) tends to provide a steer on production GDP in real time, as it captures both goods production and freight associated with both wholesale and retail trade, as well as exports. The Heavy Traffic Index turned markedly lower in August, though it is volatile month to month, and a series of winter storms may have played a part in truck traffic volumes not lifting off their seasonal low to their usual extent.