Page 15 - HW July 2020

stats watch
Statswatch May-Jul 2020
OUR KEY STATS this month come with a warning that some of the e ects of the Covid-19 lockdown have not yet come to the surface...
• RiskdataforApril-Junebelietheunderlyingsituation.
• NegativesintheValueofBuildingWorkputinPlaceforthe March quarter.
• MayconsentsreboundfromApril(buto alowbase...).
DON’T TAKE SECTOR RISK AT FACE VALUE
Our exclusive new 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.
Our new “debt risk market analysis” reports for the period April-June 2020 show how much of four key industry sectors presents the most likelihood of failure in the next 18 months.
What can we derive from this latest data?
CreditWorks’ GM, Alan Johnston, comments: “Our current understanding is that payment performance (collections) is holding up very well.
“On the back of Government subsidies, and a bounce in the market post-Covid-19, there is little super cial evidence of increased debt risk at this point.”
However the underlying position is likely quite a di erent scenario, says Alan: “Evidence of more liquidations and winding up petitions are surfacing and the expectation is that the true impact of the Covid-19 lockdown will become more evident around September- October, as far as the building market is concerned.
“ e main risk band a ected at this point is the 0.6-1.25% band, where we see slight deterioration in all four sectors.
“ is would explain the slight lessening in the lower risk band numbers, as the movement outwards starts ever so slightly. It will be interesting to monitor these numbers next month...”
In the meantime, winter has arrived, so work levels in the building industry will naturally reduce to shorter hours, and the rain will also impact on work levels – and earning capacity.
DROPINMARCHQUARTERBUILDINGWORK
While it’s not unusual for a March quarter to fall below the previousDecemberquarter’s gures,theMarch2020quarter’s Value of Building Work put in Place released by Stats NZ (v) on 8 June shows a drop in the actual total value of building work compared to the previous year.
Admittedly coming o a very buoyant March 2019 quarter, the overall total for the March quarter this year was $5.9 billion
“The true impact of the Covid-19 lockdown will become more evident around September-October, as far as the building market is concerned”
(–4.2% percent on the 2019 quarter), with residential work of $3.8 billion (–2.8% on 2019), and non-residential work of $2.0 billion (–6.7%).
Around the country, the only region to show an increase in the Value of Building Work put in Place was Rest of South Island (excludes Canterbury) which was +6.7% on the same quarter in the previous year.
e year ended March 2020 remains positive however with the overall value of building work put in place at $25.2 billion (+6.6% on YTD March 2019), comprising $16.1 billion of residential building work (+5.6%) and $9.1 billion of non-
Steve Bohling
GROUP EDITOR
steveb@mpm.nz
ddi 09 304 2705 | mob 021 0223 6887
Susan Kennedy
ACCOUNT MANAGER
susank@mpm.nz
ddi 09 304 2706 | mob 021 317 176
Karen Condon
ACCOUNT MANAGER
karenc@mpm.nz
ddi 09 304 2707 | mob 0275 420 338
Phone 09 375 3097 Lower Ground Level, 83 Mt Eden RD, Gra on, Auckland 1023 PO Box 28372 Remuera, Auckland, 1541, NZ
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
JULY 2020 | NZHJ 13
MPM7762 0619