CHANNEL DEBT IMPROVES IN APRIL

By NZHJ May 20, 2016 Industry news

April’s debt figures show further improvement for the building materials industries, with a couple of exceptions.

Above: Total channel debt to April 2016.

In terms of overall debt, Alan Johnston at CreditWorks (www.creditworks.co.nz) says: “Improved debt collection across the board has resulted in an expected reduction of overall debt on the CreditWorks database.”

Thus the figure for total channel debt dips below $1.5 billion again, even though it is sitting above 2015 levels once more.

DSO also improves

In terms of Days Sales Outstanding, CreditWorks reports: “As expected, we see continued improvement in DSO across the building sector in nearly all categories, the only exception being the Glass sector, which saw a very small rise.”

The previous two main sectors of concern – Building Materials and Roofing – both continued their significant improvement.

Looking further out

What of the outlook? “With trends following previous years’ patterns, I reinforce my past expectation that improvement will continue next month,” says Alan Johnston, after which a levelling out is expected.

Above: DSO (Days Sales Outstanding) by sector May 2015 to April 2016.

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