TRANSCRIPT 🔗
00:00:00
Speaker 1: New data shows fewer kiwis are behind on their loan repayments. But is it a sign of economic momentum or are we just borrowing and spending less because well, we can't afford it. Here are some key figures from the latest centrist Centrics Credit Indicator report. The number of consumers behind on debt repayments is down to a four year low. That's around four hundred and thirty thousand in May, down eleven thousand. However, there is still a large number under serious financial pressure. Eighty nine thousand of those people are more than ninety days in arrears. Most of them are renters. But yes, maybe we are borrowing less. Credit demand is down five point three percent year on year in June, indicating households are cautious about taking on new credit. Keith McLoughlin is Centrics Managing Director, joins us this morning. Keith, good morning, good morning, Ryan. Great to see you. What is this telling you?
00:00:53
Speaker 2: I thank you pretty much summed it up. What we've seen is not only is it a four year low for areas, but it's also this year, this calendar year has been quite a steep decline in areas. So there is a very strong trend in a falling areas amount, which is really encouraging. But I think you are quite right that most households are now managing their budgets a lot better. Discretionary spending is pulled back to some extent, and that's allowed the repayment of some of those areas and to maintain the payments. So I think across all the areas, areas are falling down, other than retail energy with a slight increase, and I think that's partly because of the increase in power costs.
00:01:29
Speaker 1: Yeah, right, what about what does this tell you, like in terms of where we're at in the cycle? In Jesus, cycle has been going a long time now in terms of the curnch, isn't it. But you know, when we come out of this, we should be in a better place. And as households, I believe.
00:01:44
Speaker 2: So. I think when you look at the fact that the areas are under control, households obviously have surplus cash because they're paying off some of those areas. They paying their accounts some time. And I think that as confidence grows, fewer prices to come back to a more realistic level, there will be some disposable income and households, which will then feed back into those small businesses that are struggling at the moment.
00:02:06
Speaker 1: Who desperately need it. And what are the main categories in terms of areas what are we behind on?
00:02:12
Speaker 2: Well, as I said earlier, it's mainly you're really the rears at the moment, retail energy, that the mandatory accounts where you've got power, you've got internet, you've got rents. Those are things that tend to fall behind, whereas the discretion of ones like buying our pay later tend to have been paid down to some extent. Credit cards have noticed have spiked weep it the areas on credit cards and I think that's just again a tidy up of the repayment of the historical areas that have been sitting on credit cards.
00:02:45
Speaker 1: In terms of the most well that those are the least money problems nine to nine problems. But money ain't one. In Tasman that is the lowest areas district, is it, Yes?
00:02:57
Speaker 2: It is? Yes?
00:02:58
Speaker 1: What's that about?
00:02:58
Speaker 2: Well? First, well, I think the difference between North and South Ireland and I think when you're looking at an area like Tasman, there is a stable population, there is employment opportunities, down there. I think that there's a more compact environment. Whereas you look at areas like Auckland and some of the North Island areas where there have been industry closures, where there tends to be a higher unemployment rate that naturally flows into areas, but areas like Tasman, South Canterbury, Marlver to some extent, Certay, Central Otago where you'd expect areas very low in those areas.
00:03:31
Speaker 1: Fascinating stuff, good to see this morning. Thanks so much for being with me. Keith mcgoughlan, Centrics, Managing Director with US Lyne