Agriculture drives weak economy

Traffic flows on some of New Zealand's key roads suggests a generally weak economy is being protected by strong agricultural production.

ANZ's monthly Truckometer indexes, which measure both light and heavy traffic on roads to help reflect economic growth, both rose in August.

The heavy traffic index, which measures movements of vehicles weighing more than 3.5 tonnes on 11 roads, increased 1.3 per cent on a seasonally adjusted basis, suggesting ''steady, if unspectacular, economic growth through the middle of this year'' economist Sharon Zollner said.

The light traffic index, measuring light vehicle flows on nine roads, rose 1.3 per cent. Seen as a leading indicator for economic growth six months ahead, ANZ said the results pointed to weak growth in the middle of the year, and reflected ''ongoing pressure in the consumer sector in particular''.

Zollner said the two indexes gave slightly conflicting signals about growth, with heavy traffic flows painting a more bullish picture than light traffic movements had.

''Putting the two indexes together, the [June quarter] story is of current weak underlying economic momentum saved to some extent by an exceptional end to the last agricultural growing season. (We noted in regard to the very strong May result that the strength was centred on roads near dairy factories).''

- © Fairfax NZ News