Page 15 - HW July 2022

Statswatch – May 2022
INTENTIONS TO BUILD in residential construction continue to set records at the same time as debt levels are spiking...
• Debt levels cause for concern despite risk levels looking OK • More records for intentions to build in May consents.
MAY 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.
In the last issue, the April month’s data continued to show improvement in the risk profiles of our four business sectors, although CreditWorks’ Alan Johnston again underlined the need for vigilance when it comes to risk management.
May’s data suggests more of the same, however having said this, CreditWorks also reports an increase in 60-90 day debt levels.
In the last month alone, says Alan Johnston in late June, debt exposure in 60 days has increased by 25%, and debt levels at 90 days have increased by 33%, or by $35 million in dollar terms.
This has also contributed to CreditWorks’ overall database currently seeing the highest levels of debt in its 20-year history.
“There is no doubt there is stress in all sectors of the market, with cost of living making a significant impact on debt repayment ability,” says Alan Johnston.
“While there appears to be considerable work currently
in the building sector, a lot of building companies are struggling to finish work within reasonable timeframes, due to material shortages, supply lines, and access to progress payments.”
No coincidence then that a number of larger building franchises are predicting a major slowdown in the future, with forward bookings 12 months out looking bleak.
MAY 2022 BUILDING CONSENTS
Despite growing concern about how many consents will actually be completed within their allotted two-year period, figures for the May 2022 month from Stats NZ (www.stats. govt.nz) show intentions to build remain at record levels.
“There is no doubt there is stress in all sectors of the market, with cost of living making a significant impact on debt repayment ability”
By value, the May 2022 consent values were as follows: • Residential: $2.0 billion (+7.2% on May 2021)
• Non-residential: $1 billion (+32.6%)
• Total: $3.1 billion (+14.9%).
By volume, 4,528 dwellings were consented in the month (+7.8% on May 2021), 2,481 of which (54.8%) were multi- unit homes, comprising townhouses, apartments, retirement village units, and granny flats.
stats watch
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JULY 2022 | NZHJ 13
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