Page 15 - HW Oct 2022

Statswatch – August 2022
AUGUST RISK, CONSENTS data show signs of strain but not in residential building.
• Risklevelsrisebutnotforresidentialconstruction
• CanterburyleadsgrowthinAugustconsents.
AUGUST 2022 RISK DATA
Our regular data series from CreditWorks Data Solutions (www. creditworks.co.nz) assesses the level of credit risk posed by the four business sectors most closely associated with our chosen industry:
• Hardware,Building&GardenSuppliesRetailing • CoreRetailing
• ResidentialConstruction
• CommercialConstruction.
In the last issue’s Statswatch, the June month’s data continued to show good cashflow and payment profiles, somewhat flying in the face of all the negative forecasts around the construction sector.
Jumping now to August, CreditWorks’ latest real-world risk data reveals an interesting mixed bag.
First, it is evident that there is increased risk appearing around Core Retailing, particularly in the 20-40% likelihood of failure category (see the chart top left).
“While still reasonably slight, the adverse movement is becoming noticeable,” comments CreditWorks’ Alan Johnston.
Similarly, in the Hardware / Building / Garden Retailing sector, there is now more discernible evidence of greater risk around the 40-80% likelihood of failure category.
“It is a bit worrying at this level. There is a clear deterioration in this sector which will need to be watched closely over coming months,”warnsAlan.
CommercialConstructionshowsasimilarpatternandthe
August risk in the 40-80% category is now four times more than in June.
Clearlycostoflivingandinflationaryissuesarebigfactorsin theseresults.
The good news?
“Residential Construction is still in a strong position,” says Alan Johnston, “with volume of work, and good cashflow ensuring there is no risk deterioration in this sector.
“CreditWorks’ data, and our latest insights into this sector show that risk and debt aging is the lowest in the sectors we monitor.
“Indeed,the‘headwinds’intheResidentialsectorarereducing allthetimeandarestartingtoresemblemoreofa‘breeze’every day,”heconcludes.
We hope to share more in-depth information around CreditWorks’ unfashionably optimistic outlook for the Residential Construction sector online soon and in the next edition of NZ Hardware Journal.
AUGUST 2022 BUILDING CONSENTS
Consents for the August 2022 month from Stats NZ (www.stats. govt.nz) remain at high levels. By value, the August 2022 consent values were as follows:
• Residential:$2.2billion(+14.3%onAugust2021)
• Non-residential:$100million(+22.3%)
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SEPTEMBER/OCTOBER 2022 | NZHJ 13
“The ‘headwinds’ in the Residential sector are starting to resemble more of a ‘breeze’ every day”
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