ABOVE: DSO (Days Sales Outstanding) by sector Jan–Dec 2017 (Source: CreditWorks).
More or less status quo in November
In November overall DSOs reduced slightly (see above) and, apart from a correction in the concrete sector, the status quo prevailed.
Debt levels on the CRISworks database for November were just below last year.
December debt drops off
Come December, says CreditWorks’ Alan Johnston: “As expected, overall debt levels dropped off, leaving debt is at almost identical levels as this time last year [see chart below].
“However you will notice that since August there has been a slow decline in overall debt compared to the previous year when there was still a strong growth phase.
“This reflects the market observations that building work has peaked and now levelled off, albeit at high levels.”
December’s DSOs deteriorate
Also as previously anticipated, overall debt aging (DSO) deteriorated in December, for reasons previously explained (again see chart above).
Nevertheless, the building industry – other than the concrete sector, as you can see in the graph opposite – bucked this trend, probably as a result of previous years’ experiences around this time and greater education around the importance of debt recovery in this sector at this time of the year.
However, warns Alan Johnston: “Expect January debt and aging (DSO) to increase throughout January.”
BELOW: Total debt on CRISworks database to Dec 2017 (Source: CreditWorks).