The data points to a recovery that is now well established, with sales climbing to their strongest levels of the cycle, arrears easing across almost every region, and construction holding its ground. Total debt stayed high, partly on fuel-price effects, but the underlying picture is one of genuine momentum. Payment behaviour is improving and credit risk indicators are firmly pointed in the right direction.
- Rolling annual sales rose again in May, with nominal sales up 1.6% month-on-month and 12.0% year-on-year, the strongest annual reading of the cycle. Inflation-adjusted sales rose 1.3% month-on-month and 8.7% year-on-year, confirming genuine activity rather than price effects alone.
- Total debt under company debtors rose 16.9% year-on-year, with roughly a quarter of that growth attributable to fuel-price impacts on outstanding balances. The remainder reflects broad-based growth across vendor sectors.
- Arrears eased further in May. 60-day-plus arrears fell to 2.71% (down 3bps MoM and 63bps YoY) and 90-day-plus eased to 1.61% (down 9bps MoM and 58bps YoY), supported by both lower overdue balances and a growing debt base.
- Regional arrears were mixed, with Wellington the outlier. 60-day-plus arrears there rose to 6.50% (up 137bps MoM and 155bps YoY), while Auckland, Christchurch and the other regions all moved lower. Christchurch recorded the largest year-on-year improvement, down 172bps.
- Debtors going ‘bad’ (defaults, judgments, liquidations) eased 1.3% month-on-month and rose 2.3% year-on-year on a rolling annual basis, a gradual rather than sharp trend.
- Construction consents softened slightly, with seasonally adjusted new dwelling consents easing 4.0% in May, though the smoothed long-run trend rose a further 1.7%. South Island consent growth (+38.7% since Dec-19) continued to outpace the North Island (-6.1%), though the North continues to recover.
- Sales growth was positive across all major debtor industries, led by Concrete & Steel (+23.3% YoY), Retail (+17.8% YoY), Food & Beverage (+17.5% YoY), Plumbing & Electrical (+17.2% YoY) and Manufacturing (+14.5% YoY).
- Construction remained the clear arrears outlier at 5.37% against an overall rate of 2.71%, though it improved materially month-on-month, down 60bps. Most other industries stayed at or below the overall level.
- Vendor-side payment behaviour (DSO) improved across most segments month-on-month, including Building Supply Merchants (down 3.7%) and Concrete (down 3.6%). Plumbing DSO eased slightly (down 1.0%), though plumbing merchant 60-day-plus arrears remain up sharply year-on-year, so faster payment timing has not yet flowed through to a broadly healthier plumbing picture.
For the full story, including sector-by-sector detail, regional analysis, and vendor payment insights, read our Latest Industry Risk Indicators, July 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.