Page 17 - HW November 2020

stats watch
Statswatch Sep-Oct 2020
OUR KEY STATS this month again show a mixed bag of positives and negatives.
• HeightenedriskamongcommercialconstructorsinOctober
risk data.
• AucklandboomsinSeptemberconsents.
COMMERCIAL CONSTRUCTION A CONCERN
Our exclusive data from CreditWorks Data Solutions (www.creditworks.co.nz) and “debt risk market analysis” reports for the period August-October 2020 show how much of four key industry sectors presents the most likelihood of failure in the next 18 months.
Contrary to earlier expectations, the economy has held up better than expected.
CreditWorks’ GM, Alan Johnston, comments: “Residential construction is at all time high levels, and retailers are reporting continued high levels of sales. As such, there is little evidence in these sectors of increased risk for now.”
And looking further out?
“It is reasonable to assume that this activity will continue through to Christmas,” says Alan, whilst adding a caveat: “However history tells us – whatever level sales activity is at – that the period January through to March represent the greatest debt risk period in any year.
“Spending on credit is high in the latter stages of the year and debt, as well as taxes, need to be paid in the first quarter of the New Year, so trade payments can (and will) suffer during this time, as they are often seen as not being a priority in the payment cycle.”
Residential construction may be singing along, but commercial construction is a concern at this point.
“The latest BDO survey confirms many commercial operators areoperatingwithsmallmarginsandlittleforwardwork,”points
out Alan Johnston.
“The withdrawal of firms from commercial office space during
and subsequent, to Covid-19 restrictions has resulted in excess office space.
“The best outlook for commercial construction is in the industrial and retail areas, but nevertheless, this is going to be a difficult market going forward.
“As such, our risk profiles in this sector are showing a slight increase for October in the higher risk bands for Commercial Construction.”
REBOUND COLOURS SEPTEMBER CONSENTS
September 2020’s consent figures from Stats NZ (www.stats. govt.nz) again reflect some rebound effects from lockdown. Consents for the September 2020 month were as follows:
• Residential: $1.6 billion (+14.3% on September 2019). • Non-residential: $758 million (+22.7%).
• Total: $2.3 billion (+18.8%).
Among these numbers, with more than $700 million coming from residential projects, the monthly value of building consents issued in Auckland alone surpassed $1 billion for the first time ever, accounting for no less than 44% of the month’s national total.
By volume, September totalled 3,605 new homes consented in September 2020 (+7.7% on September 2019), with Auckland accounting for 1,734 of these, the city’s highest number since October 2002, and the biggest volume nationally since May 2019.
September’s dwellings comprised: • 2,052 standalone houses.
• 1,032 townhouses, flats & units.
• 403apartments.
• 118retirementvillageunits.
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