Page 17 - HW April 2021

stats watch
Statswatch
– February 2021
DOUBTS CONTINUE TO grow about non-residential construction in the first two months of 2021.
• Risk continues to grow in Commercial Construction.
• December quarter’s Value of Building Work put in Place. • Residential tails off in Feb consents.
DEC-FEB QUARTER RISK DATA
Our exclusive data from CreditWorks (www.creditworks. co.nz) reveals further deterioration in the risk profile of commercial construction in February.
What else can we derive from the data for the December 2020-February 2021 period?
In general, debt risk mostly remained steady across three of the four sectors being monitored.
However, Commercial Construction continues to be the main focus of attention, with a reasonably significant increase in the likelihood of failure statistics over the last quarter.
Over 10% of the operators in this sector, as at the end
of February, represented what CreditWorks’ GM, Alan Johnston, calls “an uncomfortable level” of over 5% likelihood of default over the next 18 months.
“This statistic has grown from 8.9% in December, which is a concerning movement,” says Alan, noting that exposure to the Commercial Construction sector represents “a disproportionate level of lending risk” at present.
In comparison, only 3.9% of the Hardware, Building & Garden Supplies Retailing sector were in this category as at end of February, and 6.5% of the Residential Construction sector.
DEC QUARTER VALUE OF BUILDING WORK
The December quarter’s Value of Building Work put in Place from Stats NZ (www.stats.govt.nz) seems to underline the doubts being raised in our risk data for non-residential construction.
Still, the actual value of all building work was $6.7 billion in the December 2020 quarter, +2.7% from the December 2019 quarter.
“Exposure to the Commercial Construction sector represents ‘a disproportionate level of lending risk’ at present”
Within this, residential building work rose to $4.5 billion (+8.1% on the Dec 2019 quarter) but non-residential work fell for the fourth consecutive quarter to $2.2 billion (–6.7%).
By region, Auckland’s total value of building work was –1.9% and Canterbury’s –0.6%, while the other regions were in the positive, led by Wellington at +13%.
The non-residential building types with the most work put in place (by value) in the December 2020 quarter were: Accommodation (+16%); Education (–12%); and Storage (+4.2%).
JAN-FEB BUILDING CONSENTS
This issue we have two months’ worth of consent data from
Intelligent Hardware Inventory Solutions
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APRIL 2021 | NZHJ 15
MPM 9072 0219 B