However, look for a rise in November debt levels – CreditWorks’ Alan Johnston says: “This is consistent with last year and, if this pattern continues, we can expect an increase for November as work ramps up in what is hoped will be good work conditions pre-Xmas, weather wise.”
DSO trend steady
The average DSO for the Building Material supply sector eased out over October by approximately three days, with a slight increase also in the Concrete sector. Some improvement was shown in the plumbing sector. However, overall, the trend was steady, as it has been for the last couple of months.
DSO outlook good for now
In terms of an outlook, Alan Johnston says: “I would expect to see good results in the average DSO for November, after which time the Xmas break will impact on December, January and February’s results, as it does each year.”
Still, he warns: “Businesses need to be very vigilant and manage their credit terms tightly through these months, with many other opportunities available to spend the disposable dollar during this time.”
(Below: Total channel debt to Oct 2016.)