Welcome to the November edition of our Latest Industry Risk Indicators, providing a snapshot of how New Zealand’s trade-related and construction sectors performed through September.
September held its course. Sales reached another high, fewer businesses went ‘bad’ than a year ago, and arrears moved by only a few basis points. Beneath that, the mix is changing, with Concrete & Steel overtaking Construction on arrears and new dwelling consents dipping for the month. CreditWorks has also continued to add new member data, mainly in plumbing and pipe supply, energy and resources, and joinery. Where that lifts growth rates noticeably, the like-for-like figure is shown alongside the headline.
- Rolling annual sales reached another high, with nominal sales up 1.6% month-on-month and 17.6% year-on-year. Adjusted for inflation, sales lifted 1.3% for the month and 13.7% on the year. Like for like, growth would be 11.6% nominal and 7.9% after inflation.
- Total debt under company debtors was 21.7% higher year-on-year, or 14.6% on a like-for-like basis once recent data acquisitions are taken out.
- Arrears ticked up slightly. 60-day-plus arrears rose 5bps to 2.95% (down 35bps year-on-year) and 90-day-plus rose 8bps to 1.68% (down 42bps year-on-year).
- Regional movements were mixed. Auckland rose 23bps to 3.35% and Wellington 24bps to 5.00%, partly offset by Christchurch, which eased 26bps to 2.70%. Wellington is 486bps lower than a year ago. The other regions combined eased 8bps to 2.08%, though they are 106bps higher than last September.
- The rolling annual volume of winding-up applications was unchanged from August and 16.0% higher year-on-year, above last year’s level but not building further this month.
- Debtors going ‘bad’ (defaults, judgments, receiverships and liquidations) fell 1.0% month-on-month on a rolling annual basis and were 2.0% lower than September last year.
- New dwelling consents dipped, with seasonally adjusted consents down 0.9% in September. Consents lead construction sales by around six months, which makes September’s dip an early indicator for the months ahead. The medium-term trend remains positive. South Island consents are 43.6% above their December 2019 level, while the North Island sits 1.9% below it.
- Sales growth was strong across every major debtor industry, led by Concrete & Steel (+30.9% year-on-year), Plumbing & Electrical (+24.8%, or around 22.1% like for like), Food & Beverage (+23.5%), Retail (+23.3%, or 17.7% like for like) and Manufacturing (+19.3%, or 15.1% like for like). Construction grew 11.0%.
- Concrete & Steel overtook Construction on arrears. Concrete & Steel rose 99bps to 5.45%, largely due to one Auckland-based debtor, while Construction improved 27bps to 5.16% and is 107bps lower than a year ago. The overall rate is 2.95%.
- Vendor-side payment behaviour was mixed. Across our spotlight sectors, days sales outstanding for Building Supply Merchants improved 1.9% to 42.5 days and Concrete 0.8% to 43.2 days, while Electrical Supply Merchants rose 1.2% to 47.6 days and Steel Merchants 3.7% to 35.0 days. Plumbing DSO was broadly flat at 40.8 days and plumbing merchant 60-day-plus arrears are 27bps higher than last September, so plumbing still needs attention.
For the full story, including sector-by-sector detail, regional analysis, and vendor payment insights, read our Latest Industry Risk Indicators, November Edition.