Page 17 - HW FEBRUARY 2022

Statswatch
– Nov-Dec 2021
NOVEMBER-DECEMBER’S STATS show New Zealanders’ intentions to build at highest ever levels, but sector risk is also growing.
• Slight growth in construction risk
• November consents record all-time high.
DECEMBER 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.
Our last update, reporting on the October month (see our December magazine and online), raised the likelihood of further stress in building sector cashflows.
And, with the ongoing and well-documented supply,
pricing and staffing issues facing all businesses at present
– particularly those in the building sector – it is therefore interesting to see what effect, if any, these issues are having on the merchants and retailers from a debt perspective.
Armed now with November and December 2021 data, CreditWorks’ Alan Johnston is happy to pass on that CreditWorks has been receiving “only good reports” regarding debt payment in the sectors we monitor, and that “Despite
the issues referred to above, November was the highest sales month for the building trade in history!
“That said,” continues Alan, “it is evident that with the
uncertainty surrounding future supply lines, many building companies are taking the opportunity to order in advance, and stockpile product where possible, due to anticipated demand.”
Across the Core Retailing and Hardware, Building & Garden Supplies Retailing sectors there has been little movement in debt risk over the last three months.
If anything, risk has reduced slightly.
However, in the Residential and Commercial Construction sectors that we monitor (see the first two charts below), we are seeing slight increases in risk in the higher risk bands (20-80%).
“Building companies are taking the opportunity to order in advance, and stockpile product where possible”
In this respect, adds Alan Johnston: “Those who have been feeling the debt pressure over recent months will find it tough going forward, since the January to March period is known as the most difficult period with respect to collecting debt.”
NOVEMBER BUILDING CONSENTS
Consents by value for the November month from Stats NZ (www.stats.govt.nz) continued to set new highs, as follows: • Residential: $2.1 billion (+35.9% on Nov 2020).
• Non-residential: $783 million (+11.4%).
stats watch
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