Much like the last few months, the latest data shows a mixture of positive and negative trends, but it’s the downward trends that you really need to pay attention to.
In July 2024, sales patterns varied considerably across industries. While the Automotive and Food & Beverage sectors saw strong growth, the Flooring sector and Electrical Sub-Contractors faced notable declines. Hospitality and Construction, however, posted solid gains, signalling resilience in these areas.
The Construction sector, in particular, showed steady progress, alongside improvements in debt and days sales outstanding (DSO) for Concrete & Steel. Plumbing and Electrical Merchants managed to grow despite some year-on-year decreases, while the Retail sector remained mixed, with some sub-sectors improving while others continued to decline.
On the economic front, businesses are grappling with rising costs. Increased interest rates led to a 2% increase in borrowing costs and tax changes pushed operational costs up by 3%, which is all putting pressure on profit margins that are already feeling the squeeze from inflation.
When it comes to arrears, July brought some positive news, with improvements in arrears management and significant drops in long-overdue payments. Wellington saw the best performance in this area, while Auckland and Christchurch showed more modest improvements.
The DSO data also highlighted varied outcomes. Electrical Sub-Contractors made significant strides, while the Manufacturing sector faced challenges with rising delays in payments.
Liquidation trends reveal a 19.6% year-on-year rise in winding-up applications as well as an increase in debtors going ‘bad.’
Despite improvements in arrears management, the construction sector is facing a 15-month lag between consents and actual sales, along with a sharp rise in winding-up applications.
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Please note that due to the vast amount of data required to produce these reports, most of which is accessed from a multitude of external sources, there is an inevitable time delay in their generation. However we prefer to defer their publication in favour of ensuring greater accuracy.