By NZHJ October 10, 2018 Industry news

Following July's warning signs, August debt is "steady" but is there worse to come?

ABOVE: Total Debt on CRISworks database to August 2018. (Source: CreditWorks).


Vulnerable times ahead?

Debt levels may be steady but it would be wise to remain vigilant, according to the data for August 2018 from CreditWorks Data Solutions.

August debt levels on the CRISworks database were steady compared to the previous month (see July's number here) albeit with a slight increase compared to the prior year.

However it would be fair to expect to see a continued rise in the coming months as the weather improves.

Indeed, confirms CreditWorks’ Ronnie Tan, pulling no punches: “There are very vulnerable times ahead for the commercial construction space and vigilance and continued monitoring and review of debt exposures and payment performance is warranted and to be encouraged,” he warns.


DSOs “steady as she goes”

Debt levels are being watched closely, which is reflected in the DSO figures for the month with most sectors maintaining a “steady as she goes” position.

Ronnie Tan adds that although most of these numbers remain steady and we’re not seeing a lot of significant change, the telling times will be in the first quarter of next year. 


BELOW: DSO (Days Sales Outstanding) by sector, September 2017-August 2018. (Source: CreditWorks).


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