Page 13 - HW June NEW 2022

Statswatch – Mar-Apr 2022
INTENTIONS TO BUILD in residential construction speed along, while commercial construction shows more signs of strain.
• Riskmanagementshouldbetopofmindrightnow
• More of the same in the March quarter Value of Building
Work put in Place
• More multi-units driving April consents.
APRIL 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.
The March month’s data showed improvement in most risk profiles from the same time last year, with the caveat that Commercial Construction continued to be a concern as the only sector whose position has deteriorated over the last 12 months.
Now, however, armed with April’s data and the knowledge that well over 200 construction companies are currently in liquidation – 96 so far this year alone – CreditWorks’ Alan Johnston reiterates the need for risk management to be at the forefront of any business manager’s mind right now.
The latest building company to fail is Oceanside Homes in Tauranga, leaving suppliers and subbies out of pocket by at least $500,000.
“Should have seen it coming” is a common response after the event.
But Alan Johnston says there are warning signs that may help prevent potential creditors being caught out by
situations like Oceanside’s.
They include the history of the company (Oceanside
forexamplehadonlybeengoingforalittleoverthree years), director resignations, recent extensions of payment terms, and the state of the company’s DSO.
“As we know, the building industry is in the middle of a perfect storm at present, so we haven’t seen the end of these issues,” says Alan.
“Merchants and credit suppliers must be overly vigilant at these times.
“Before you do business with a contractor, check them out thoroughly, or if it is someone who is on your books already, monitortheirongoingactivityandcreditexposureinthe marketplace–circumstancesmaychange,andnotnecessarily throughtheirownactions.”
Inthisrespect,CreditWorkshaslauncheditsCheckMate credit report. Available on any New Zealand company, this service should be of particular interest not only to sub- contractors but also those who are engaging the services of builders and other contractors.
The reports will show the company score, and the likelihood of failure in the next 18 months (as per our regular sector snapshots shown on these pages), as well as a raft of other useful information points, so it’s a cheap investment that may provide some peace of mind.
MARCH QUARTER VALUE OF BUILDING WORK
The December 2021 quarter’s Value of Building Work put in Place having showed big gains, the first quarter of 2022 was more of the same.
Released on 1 June, the March 2022 quarter’s Value of Building Work put in Place from Stats NZ (www.stats.govt.nz) was +20% by value on the March 2021 quarter.
stats watch
Steve Bohling
GROUP EDITOR
steveb@mpm.nz mob 021 0223 6887
Susan Kennedy
ACCOUNT MANAGER
susank@mpm.nz mob 021 317 176
Karen Condon
ACCOUNT MANAGER
karenc@mpm.nz mob 0275 420 338
Phone 09 375 3097 PO Box 28372 Remuera, Auckland 1541 New Zealand
Want to talk to us?
NOTE OUR PHONE & ADDRESS DETAILS
Nic McCord
EVENT MANAGER
awards@mpm.nz mob 021 828 142
MORE AT www.facebook.com/nzhardwarejournal
JUNE 2022 | NZHJ 11
MPM7762 0920