Welcome to the August edition of our Latest Industry Risk Indicators, providing a snapshot of how New Zealand’s trade-related and construction sectors performed through June.
The data points to a recovery that continues to broaden, with sales at their strongest levels of the cycle and growth showing through across almost every industry. Arrears ticked up modestly over the month but remained comfortably below last year, leaving a picture of steady progress with only a few pressure points to watch.
- Rolling annual sales rose to their strongest levels of the cycle, with nominal sales up 1.9% month-on-month and 13.5% year-on-year. Adjusted for inflation, sales lifted 1.6% for the month and 10.0% on the year, confirming the gain reflects real activity rather than price effects alone.
- Total debt under company debtors was 21.0% higher year-on-year, with around 15% of that rise attributable to higher fuel prices flowing through outstanding balances and the remainder spread broadly across vendor sectors.
- Arrears edged up slightly over the month but remained well below last year. 60-day-plus arrears rose to 2.88% (up 15bps month-on-month, down 101bps year-on-year) and 90-day-plus rose to 1.65% (up 5bps month-on-month, down 63bps year-on-year).
- Regional movements were mixed. Wellington improved sharply, with 60-day-plus arrears easing 129bps to 5.21%, while Auckland, Christchurch and the other regions ticked up modestly. Every region remained lower than a year ago, led by Christchurch (down 194bps) and Auckland (down 131bps).
- The rolling annual volume of winding-up applications rose 3.9% month-on-month and 14.3% year-on-year, a steady climb rather than a sudden jump in insolvency pressure.
- Debtors going ‘bad’ (defaults, judgments and liquidations) were flat month-on-month on a rolling annual basis and up just 1.3% year-on-year, pointing to a stable rather than deteriorating trend.
- Construction held its ground, with seasonally adjusted new dwelling consents easing 3.6% in June while the longer-term trend stayed firm. South Island consents remained 42.4% above their December 2019 level, well ahead of the North Island.
- Sales growth was positive across every major debtor industry, led by Concrete & Steel (+26.9% year-on-year), Food & Beverage (+20.5%), Retail (+19.4%), Plumbing & Electrical (+19.3%) and Manufacturing (+15.9%).
- Construction remained the clear arrears outlier at 5.29%, well above the overall rate of 2.88%, though it continued to sit within a broadly improving picture across most other industries.
- Vendor-side payment behaviour improved across most segments year-on-year, reflecting faster payment cycles. Plumbing merchants were the main exception, where days sales outstanding edged up over the month and arrears rose year-on-year, a segment worth keeping an eye on.
For the full story, including sector-by-sector detail, regional analysis, and vendor payment insights, read our Latest Industry Risk Indicators, August Edition.
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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.