Page 19 - HW June-July 2021

stats watch
Statswatch – May 2021
MAY’S STATS SEEM almost normal after April’s massive gains on low lockdown numbers.
• Mayrisk:steadyasshegoes.
• Marchquarter’sValueofBuildingWorkputinPlace.
• ModerategrowthinMayconsents.
MARCH-MAY RISK DATA
Our latest risk data for May 2021 from CreditWorks (www. creditworks.co.nz) indicate no real increase in risk in and around the hardware channel, despite high levels of ongoing activity making for growing debt levels.
Data for the April month revealed little risk movement in the four key categories we monitor each month, although Creditworks’ CRISworks database was showing a very high level of (slightly) aged debt.
Which direction did risk take in May?
“While debt levels continue to rise,” comments CreditWorks’ Alan Johnston, “This is more a reflection of the amount of business being done, rather than debt aging.”
Although the CRISworks database reached record levels (over $2.4 billion) of exposure by end May, Alan describes the average DSO (Days Sales Outstanding) as still at a “very acceptable level”, just over 41 days (with 30 days being ideal).
He continues: “This too suggests that, while the industry is consuming materials, and building like there is no tomorrow, there is still a strong emphasis on maintaining good payment terms.
“With the timber shortages – and many other products being inshortsupply–thesupplierstendtoholdmostofthecards atpresent,soitisnotinthebestinterestsofthetradietoget offside with his supply merchants at this point in time.”
Indeed, the risk profiles in nearly all the four sectors we monitor have remained quite steady.
Even Core Retailing is showing no real signs of deterioration, while movement in the other sectors is all around the lower risk bands,andthereforedoesn’tposeagreatdealofconcernwhenit comestoriskprofilinggoingforward.
Lookingfurtherout,AlanJohnstonroundsupthepicture thus: “As we go into the winter months, we can expect the debt market to remain steady, and settled, as is somewhat traditional during this period of the year.”
Data for June will be posted online first so look to www. harwdarejournal.co.nz for early notice of changing risk profiles.
“As we go into the winter months, we can expect the debt market to remain steady, and settled”
MARCH QUARTER VALUE OF BUILDING WORK
Released early last month, the data for March 2021 quarter’s Value of Building Work put in Place from Stats NZ (www. stats.govt.nz) showed the expected gains in residential building activity while non-residential activity fell for the fifth consecutive quarter.
The actual value of all building work was $6.7 billion in the quarter, up 13% on the Covid-19 impacted March 2020 quarter, comprising:
• Residential:$4.6billion(+20.6%ontheMarch2020quarter). • Non-residential:$2.1billion(–0.6%).
By region, the actual value of all building work in the March 2021 was led by growth in Wellington (+29% on the March 2020 quarter), followed by Waikato (+18%) and Auckland (+13%).
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JUNE/JULY 2021 | NZHJ 17
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