Page 15 - HW May 2022

Statswatch – March 2022
INTENTIONS TO BUILD in residential construction speed along, while commercial construction shows more signs of strain.
• Risk data raises further concern for the Commercial
Construction sector
• March consents take us past 50,000 dwellings for the year,
multi-units dominate.
MARCH 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.
Looking at the wider picture this month, it is interesting to see improvement in most risk profiles from the same time last year.
From the perspective of accounts with a greater than 5% likelihood of failure in the next 18 months, Core Retailing – as somewhat expected – currently carries the greatest risk with 18.5% of all debt exposure for the sector falling into this category.
“Given the nature of the retail debt market, it is not surprising,” qualifies CreditWorks’ Alan Johnston.
“Nevertheless, this risk band has almost halved in the last 12 months, down from 37.7% this time last year.”
The Hardware & Garden Retailing sector has also improved, from 3.6% to 3.4% of all exposure in this category, with Residential Construction too having halved its risk from 6.2% to 3.1%. This sector continues to show the lowest percentage representing a failure risk of over 5%.
However, Commercial Construction continues to be a concern as the only sector whose position has deteriorated over the last 12 months, now registering a 9.5% result in March, against 9.3% this time last year.
In this respect, Alan Johnston says: “While in percentage terms, it may seem that the Retail sector is at a greater risk, it must be remembered that Retail accounts are generally of much greater number, with risk generally spread over thousands of accounts, and usually small in exposure per account.
“In comparison, the Commercial Construction sector is
“Commercial Construction continues
to be a concern as the only sector whose position has deteriorated over the last
12 months”
made up of a far smaller number of players, with each carrying debt of much higher levels.
“So, to have 9.5% of the Commercial Construction sector representing a risk of greater than 5% failure would represent a much greater loss per company, should they ‘fall over’, so to speak.”
MARCH 2022 BUILDING CONSENTS
Consents for the March 2022 month from Stats NZ (www. stats.govt.nz) came after more records in February.
By value, the March 2022 numbers were as follows: • Residential: $2.3 billion (+26% on March 2021).
• Non-residential: $998 million (+29.6%).
stats watch
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