April showed a slowdown across much of the market. Sales remain behind 2024 levels, partly due to fewer trading days, but the real story is beneath the surface. Credit risk is quietly building, even as some arrears figures improved slightly month-on-month.
Businesses are holding less debt than last year, reflecting a more cautious approach focused on stability over growth. At the same time, Days Sales Outstanding (DSO) is creeping up across industries like Roofing, Concrete, and Residential Building, signalling longer wait times for payments and added strain on cash flow.
Liquidations
Winding-up applications dropped slightly from March but remain over 24% higher than this time last year. Bad debtor volumes fell for the first time in months but still sit nearly 30% above 2024 levels. It’s not a market crashing down but a selective one, where businesses are watching cash flow more closely and becoming more selective about who they trade with.
Media commentary focuses on rising insolvencies to indicate an industry faltering but often misses the main motivator. The IRD has shifted from COVID cuddles to cracking down on historic debt, driving a considerable share of winding-up applications. This tougher stance reflects overdue accountability rather than a widespread cash flow collapse and doesn’t necessarily signal an increase in systemic industry risk. Meanwhile, personal insolvencies remain subdued and voluntary liquidations have dipped, highlighting a move toward forced insolvencies.
Sectors
Retail and Food & Beverage sectors performed well, particularly in Christchurch and Wellington, while some manufacturing segments show signs of stabilising. However, construction-linked sectors, including Concrete and Plumbing, face challenges with rising DSO and slower collections.
The evolving credit environment demands businesses stay sharp. Real-time monitoring of customer payment behaviour, tighter credit policies, and firm follow-up will separate those who stay in control from those caught out.
Read the latest insights: Knowing your customers’ financial health is no longer optional.
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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.