Page 17 - HW September 2020

stats watch
Statswatch July-Aug 2020
OUR LATEST DATA sets reveal no rm picture of the road ahead for the building and associated industries.
• June-August risk analysis says beware of thin ice.
• June quarter value of building work put in place re ects
lockdown restrictions.
• Rebound curve attens with July consents.
JUNE-AUGUST QUARTER RISK DATA
Our exclusive data from CreditWorks Data Solutions (www. creditworks.co.nz) assesses with a high degree of accuracy the level of credit risk posed by a particular industry sector. What can we derive from the data for the June-August quarter?
CreditWorks’ GM, Alan Johnston, comments: “ e June- August quarter revealed a slight increase in risk in a couple of key sectors. And as we went to print, there was a further signi cant construction company failure in Christchurch (Casa Construction).
“Both of which remind us that we are now entering somewhat unknown, and potentially hazardous, territory when it comes to the impact of the removal of Government wage subsidies, and the impending (yes we are that close!) e ect Christmas always has on credit payment pro les, in this new Covid world.
“On the plus side, record low interest rates are fuelling borrowing (most of it for house purchasing), a high “immigration” rate of returning New Zealanders (nearly 50,000 since March) is boosting the housing and construction market and builders are reporting continued unprecedented levels of activity in general.”
Having said this, our latest gures for the Core Retailing sector (chart top left) are showing a 10% increase in risk levels in the Above 5% risk bands. is means that 38% of all retailers in this sector represent a risk likelihood of failure of above 5%. While very few of these are above the 20% risk likelihood, it’s to be hoped that this trend doesn’t continue.
Commercial Construction (chart below left) also shows movement in this direction. While not to the same degree as
Core Retailing – or in the same numbers – nevertheless, the June- August quarter has seen an 11% growth in risk above the 5% risk bands, on a smaller scale.
Alan Johnston concludes: “While clearly, no-one knows what the future holds in this uncharted, post-Covid world, I believe we need to be very careful when it comes to taking lending risks in the near future, as although it appears solid, the ice could be very thin in some places.”
JUNE QUARTER BUILDING WORK PUT IN PLACE
Unsurprisingly, Stats NZ’s (www.stats.govt.nz) data for the value of building work put in place for the June 2020 quarter re ect the restrictive circumstances the building trade experienced between April and June.
e actual value of building work put in place in the June 2020 quarter is as follows:
• Residential: $3.1 billion (–22.2% on the June 2019 quarter).
• Non-residential: $1.6 billion (–27.5%).
• Total: $4.7 billion (–24.1%).
By region, the actual value of total building work in the June 2020 quarter (compared with the June 2019 quarter) was down across New Zealand:
• Auckland: $2.0 billion (–26%).
• Waikato: $448 million (–20%).
• Wellington: $408 million (–22%).
• Rest of North Island: $722 million (–24%).
• Canterbury: $645 million (–28%).
• Rest of South Island: $509 million (–16%).
e non-residential building types with the most work put in place (by value) in the June 2020 quarter were:
• O ce, Administration & Public Transport: $254 million
(down 31% from the June 2019 quarter). • Education: $226 million (–30%).
• Storage: $221 million (–16%).
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
SEPTEMBER 2020 | NZHJ 15
MPM7762 0920