Page 17 - HW March 2022

Statswatch
– January 2022
THE BUILDING BOOM continues, bringing with it increased risk thanks to the time of year, supply chain disruption and skills shortage all combining at a time when the volume of work remains at historic highs.
• Construction-related risk rises noticeably in January
• January is also second highest ever month for dwelling
consents.
JANUARY 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 & Garden Supplies Retailing
• Core Retailing
• Residential Construction
• Commercial Construction.
Our last update, reporting on October-December (see the last issue),showed slight end-of-year risk increases for the Residential and Commercial Construction sectors.
Now, armed with January 2022 data, we can clearly see a noticeable risk increase across all four sectors, particularly in the 5-10% likelihood of failure risk bands (see graphs opposite).
CreditWorks’ Alan Johnston comments: “As earlier identified, we are in the middle of the toughest period of the year where debt becomes harder to recover.
“Aligned with the obvious problems of Christmas, and meeting tax, the building industry in particular is suffering with supply issues, as is well known, and this is slowing up
construction in many cases, and in turn progress payments. “Without product, the build can’t be progressed, the progress
payment can’t be made, and the supplier can’t get paid.” Looking forward now, says Alan: “February is already
showing signs of stress, and we have seen several well- publicised business failures this month, as is usual for February – remember, this is the toughest collection month, and the month where traditionally there are the most company liquidations.
“Expect to see further deterioration, represented by higher risk levels, in February’s figures”
“So I expect to see further deterioration, represented by higher risk levels, in next month’s figures.”
JANUARY 2022 BUILDING CONSENTS
The number of consents for the January 2022 month from Stats NZ (www.stats.govt.nz) may have been down on
the record-setting level seen in January 2021 but it still represented the second highest monthly number ever.
By volume, 2,833 new dwellings were consented in the January 2022 month (–6.3% on Jan 2021), of which 51% were standalone houses, 36% townhouses, flats & units, 7% apartments and 6% retirement village units.
stats watch
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