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Statswatch – June 2022
INTENTIONS TO BUILD in residential construction speed along, while commercial construction shows more signs of strain.
• Positiverisklevels,paymentprofiles
• CanterburygrowththebrightspotinJuneconsents.
JUNE 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, the May month’s data continued to show improvement in the risk profiles of our four business sectors, although CreditWorks’ Alan Johnston again underlined the need for vigilance when it comes to risk management.
June’s risk data suggest more of the same and support CreditWorks’ findings around payment profiles, which Alan describes as “quite strong.”
He continues: “Despite all the negative forecasts
and current issues facing the commercial sector
in general, and construction in particular, we are still seeing good cashflow and payment profiles for the key industries we cover.
“Feedback on collection activity with most of our suppliers indicate good payment profiles,” he says.
In response to negative forecasts for the medium to long term future of the building industry, Alan Johnston qualifies; “While there is just cause to be concerned with rising material and living costs, labour shortages, and product supply, we are still seeing
“We are still seeing liquidations across the board however our investigations tell us that: (a) many of these are solvent liquidations, with no need for liquidator intervention; and (b) the most recent incidences (eg Compass Homes) relate to problems going back some time.
“So, while the industry in general is still trucking along quite well in most instances, it is important to be able to identify the good from the bad, and regular monitoring is recommended.”
record consent figures and activity which is up on the same time last year.”
Tothepositive,althoughconsentfiguresdon’tnecessarily equatetobuilds,positivesignsfortheconstructionmarket include action around plasterboard supply, the re-opening of our borders (which may help with labour supply), and reports of solid forward work for the next 9-12 months.
Current builds are however taking longer to complete and, while sales were down approximately 8% in June compared with May, the extreme weather issues being experienced around the countrywillaccountforsomeofthis.
AlanJohnstonconcludes:“It’snotalldoomandgloomforthe commercialsectors,althoughthatword–vigilance–continues toneedtobeapplied.
“While the industry in general is still trucking along quite well, it is important to be able to identify
the good from the bad, and regular monitoring is recommended”
stats watch
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