Page 17 - HW Sept 2021

stats watch
Statswatch – Jun-Jul 2021
JUNE’S STATS SHOW continued stellar growth in residential consents while commercial construction is the only questionable risk profile.
• Risk: lockdown will have “significant impact” on debt.
• June value of building work put in place. • July consents break records.
MAY-JULY RISK DATA
In our last update, we were starting to see debt risk increasing in the lower risk bands across all sectors – particularly in the 1.2-2.5% likelihood of failure band.
Still, comments CreditWorks’ Alan Johnston: “Movement in this band is not of great concern in the wider scheme of things, and there was nothing to suggest we were seeing any significant change in risk profiles.”
However, at the time of writing, we were still in Level 3 and 4 lockdown, so whatever we thought was going to happen on the credit front over the next few months needs to be reviewed – particularly for the Auckland market.
“This latest lockdown is likely to have a significant impact on debt in the coming months,” warns Alan Johnston.
“With all sectors of the building industry not being in a position to continue or complete work – and in Auckland’s case for at least four weeks – we would expect this to hinder progress payments, and thus make it difficult to pay on time for building supplies which were ordered pre-lockdown, as these will become due for payment in September.
“The overall risk this presents will be determined by the level of latitude suppliers are prepared to give in payment terms, while at the same time agreeing to ongoing supply.
“Their decisions in these instances will have a significant impact on the risks going forward.”
Now see the charts opposite for a visual explanation of the
last three months’ risk profiles across our four chosen sectors. Exclusive to NZ Hardware Journal, 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
Data for August will be posted online first so look to www. harwdarejournal.co.nz for early notice of changing risk profiles.
VALUE OF BUILDING WORK – JUNE QUARTER
Figures for the June 2021 quarter’s Value of Building Work put in Place from Stats NZ (www.stats.govt.nz) show big gains on the same lockdown-affected period last year, as well as more moderate but still double digital gains for residential work compared to the same period in 2019.
The June 2021 quarter’s actual value of all building work was $7.2 billion, +49.7% on the heavily impacted June 2020 quarter, and in comparison, +15.8% on the June 2019 quarter.
The June 2021 quarter’s residential building work was +58.7% at $4.9 billion (+24% on the June 2019 quarter), while non- residential work was +33.4% at $2.3 billion (just +1.4% on the June 2019 quarter).
By region, the actual value of all building work in the June 2021 quarter compared with the June 2020 quarter, was +62% in Waikato, +57% in Canterbury, +47% in Wellington, +37% in Auckland, +77% for Rest of North Island and +42% Rest of South Island.
While the Values of Building Work put in Place for the year ending June 2020 are slightly negative compared to the
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SEPTEMBER 2021 | NZHJ 15
MPM 9006A 0218