Page 17 - HW Dec-Jan 2023

Statswatch – Oct 2022
OCTOBER RISK GROWS for Commercial Construction, consents fall for the month.
• Risklevelsinretailremainsteady,constructionnotsomuch
• ValueofOctoberconsentsfalls,workaheadremainselevated.
OCTOBER 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 key take-out from October’s data, according to CreditWorks’ Alan Johnston, is that Residential Construction remains “in good shape, despite there being a few hiccups in the industry over the last few weeks.”
However more research into the recent failures indicate either (a) long term issues (Podular) or (b) bad builders (Lakeview Construction) and, in general, the risk levels in the higher risk bands are reducing.
As for Commercial Construction, concerns remain over growing risk.
“Whereas in September, only 0.8% of all exposure represented a risk of 20% or more likelihood of failure, by October this has grown to 1.1%,” says Alan Johnston.
“While not appearing a great increase, in dollar terms it is quite significant.”
Core Retailing remains steady, as does Hardware, Building & Garden Supplies Retailing, with both below the risk of failure levels in the building industry.
However, warns Alan Johnston: “Given the latest OCR rate
increases, and the likelihood the country will be in recession in the second quarter of next year, unless consumer spending isreinedinnextyear,theriskoffailureinthesesectorswill potentiallyincreaserapidly.”
OCTOBER 2022 BUILDING CONSENTS
Despite a drop in value, consents for the October 2022 month from Stats NZ (www.stats.govt.nz) remain at high levels. By value, the consent values were as follows:
• Residential:$1.7billion(–4.7%onOctober2021)
• Non-residential:$825million(+0.2%) • Allconstruction:$2.6billion(–3.0%).
Byvolume,3,568dwellingswereconsentedinthemonth (–11.9%onOctober2021),2,027ofwhich(56.8%)weremulti- unit homes (townhouses, apartments, retirement village units, and granny flats) compared to 1,541 standalone houses.
For year-to-date October 2022, consent values were as follows: • Residential: $22.8 billion (+12.6% on YTD October 2021)
• Non-residential: $9.4 billion (+14.6%)
• All construction: $33.0 billion (+13.8%).
In the year ended October 2022, 50,252 new dwellings were consented (+5.1% on YTD October 2021), led again by Canterbury (+16%), Auckland (+10%), and Wellington (+7%). Waikato’s consents fell by 3%.
YTD October 2022, growth in the consent value of non- residential buildings was driven by offices etc (+66% on YTD October 2021), storage buildings (+48%), while education fell (–3%).
The number of dwellings consented per 1,000 residents across New Zealand was 9.8 for the year ended October 2022, compared with 9.4 in the year ended October 2021.
The record number of new dwellings consented per 1,000 residents was 13.4 in the year ended December 1973.
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DECEMBER 2022/JANUARY 2023 | NZHJ 15
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