Page 15 - HW October 2020 NEW

stats watch
Statswatch Aug-Sep 2020
OUR KEY STATS this month come in advance of a crucial last quarter that will be the making or breaking of the year...
• September risk data precedes “uncharted” period...
• Multi-units again drive August month consents.
RISK GOES WHERE, POST-SEPTEMBER?
Our exclusive data from CreditWorks Data Solutions (www. creditworks.co.nz) and “debt risk market analysis” reports for the period July-September 2020 show how much of four key industry sectors presents the most likelihood of failure in the next 18 months.
September’s numbers indicate very little movement in debtor risk, the only significant movement being seen in commercial construction, where the risk level in the 10-20% band increased 17% on August figures, albeit only from 1.7% to 2%.
CreditWorks’ GM, Alan Johnston, comments: “September has seen off the last of the wage subsidies, however there is still plenty of work for most contractors in the market, and suppliers are doing very well sales-wise – particularly in the construction-related areas.”
However, adds Alan: “Debt risk is not always directly related to workflow, and we are now starting to navigate unchartered waters.
“There were at least two significant construction-related liquidations during September, totalling around a million dollars of unpaid debt.
“It was also concerning to see one of the directors come straight back into the market under the guise of another company and to see suppliers jump on board with him. Not a good way of encouraging a change in business practices.”
Looking out there, it’s clear that the next four months will be critical to the industry and to the levels of debt risk in
particular.
As a result, Alan Johnston advises very close monitoring,
adding that “Some very hard decisions will need to be made, if suppliers wish to maintain their levels of profitability over this period.
“This is not a good time to take your eye off the credit ball.”
MORE YO-YOING WITH AUGUST CONSENTS
August 2020’s consent figures from Stats NZ (www.stats. govt.nz) continue to be erratic, with the month’s residential consent value negative and non-residential positive.
Consents for the August 2020 month were as follows: • Residential: $1.3 billion (–4.4% on August 2019).
• Non-residential: $659 million (+19.4%).
• Total: $2.1 billion (+7.5%).
“Some very hard decisions will need to be made, if suppliers wish to maintain their levels of profitability. This is not a good time to take your eye off the credit ball”
By volume 3,147 dwellings were consented in the August 2020 month, –3.6% on August 2019, comprising:
• 1,791 standalone houses.
• 1,048 townhouses, flats & units.
• 205 apartments.
• 103 retirement village units.
The consent values for YTD August 2020 follow roughly the same pattern as seen in YTD July:
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OCTOBER 2020 | NZHJ 13
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