Latest Industry Risk Indicators – September Edition

• Rolling annual sales reached another cycle high, with nominal sales up 1.5% month-on-month and 14.6% year-on-year. Adjusted for inflation, sales lifted 1.2% for the month and 11.0% on the year, confirming the gain reflects real activity rather than price effects alone.
• Total debt under company debtors was 18.8% higher year-on-year, with around 15% of that rise attributable to fuel prices flowing through outstanding balances and the remainder spread broadly across vendor sectors.
• Arrears rose for a second month running but stayed well below last year. 60-day-plus arrears reached 2.94% (up 7bps month-on-month, down 77bps year-on-year) and 90-day-plus reached 1.67% (up 2bps month-on-month, down 72bps year-on-year).
• Regional movements split. Auckland eased 8bps to 3.25% and Wellington eased 6bps to 5.09%, while Christchurch rose 30bps to 3.06% and the other regions rose 16bps to 2.00%. Auckland remains the strongest annual improver, down 181bps on last July.
• The rolling annual volume of winding-up applications was close to flat over the month at 0.3% higher, but sat 15.5% above the same point last year, a slow build rather than a sudden jump in insolvency pressure.
• Debtors going ‘bad’ (defaults, judgments and liquidations) eased 0.1% month-on-month on a rolling annual basis and were 0.6% below July last year, pointing to a stable rather than deteriorating trend.
• Construction softened, with seasonally adjusted new dwelling consents falling 4.2% in July and the longer-term trend easing slightly while staying above the cyclical floor. South Island consents remain 42.7% above their December 2019 level, while the North Island has closed to within 2.3% of it.
• Sales growth was positive across every major debtor industry, led by Concrete & Steel (+28.9% year-on-year), Food & Beverage (+22.4%), Plumbing & Electrical (+21.3%), Retail (+20.5%) and Manufacturing (+16.8%). Construction grew a steadier 8.4%.
• Construction remained the clear arrears outlier at 5.53%, well above the overall rate of 2.94% and up 24bps over the month, while Manufacturing (1.43%) and Food & Beverage (0.96%) continued to sit at the low end.
• Vendor-side payment behaviour improved across most segments over the month, with Building Supply Merchants, Concrete, Steel and Retail all paying faster. Plumbing days sales outstanding also eased 1.0% to 40.3 days, though it remains 3.7% higher than a year ago and plumbing merchant 60-day-plus arrears are 59bps above last July, so that segment is 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, September Edition.