Falling traffic volumes in April marked a weak start to the second quarter - but ANZ said weather could be playing a role. Photo: RNZ / Marika Khabazi
The signs of the slowdown in the economy are growing with new data on traffic movements pointing to a soft start to the second quarter of the year.
The ANZ bank's latest Truckometer showed a 2.8 percent fall in light traffic in April on the previous month, while its heavy traffic index dropped 2.2 percent, following solid lifts in activity in March.
Chief economist Sharon Zollner said the numbers have been volatile in recent months because of the disruption of last year's lockdowns and the impact of the recent floods and Cyclone Gabrielle.
"Falling traffic volumes in April marked a weak start to the second quarter, but weather could again be playing a role."
The light traffic measure is an indication of consumer spending while the heavy traffic index points to economic production.
Zollner said the economy appeared to have managed a slight lift in activity in the first three months of the year, but it was getting tougher.
"The extreme volatility caused by lockdowns makes any other variation look small, but given it remains well off its peaks, overall the data can be characterised as consistent with consumer spending cooling as RBNZ rate hikes continue to bite."
She said traffic data was still holding up pretty well, but ANZ was still picking the "real recession" to start in the third quarter, although last week's budget and the strong immigration gains were wild cards, which could underpin activity and inflation.
"But at the end of the day, if the RBNZ concludes that a marked slowdown is the price of getting inflation down, they'll keep hiking rates until they get it."