New data reveal more people are in hardship and struggling to pay bills – a 14% increase from a year ago – with some 15,000 people facing difficulties.

Credit reporting agency Centrix released its June Credit Indicator today. It showed household arrears were levelling out while hardship and company liquidations were on the rise.

“There are signs our economy is beginning to head in the right direction,” Centrix managing director Keith McLaughlin said.

“Albeit with a few bumps along the way. Businesses, particularly in construction, property and hospitality continue to face significant challenges.”

Nearly 15,000 individual billpayers were in financial hardship, an increase of 300 from May, and 14% more than a year ago, Centrix said.

The report said 21,900 households were overdue on mortgage payments in May, 700 fewer than April.

Almost half of those cases, 46%, were due to difficulties paying mortgages, a jump of 19% from last year. Another 28% of hardship cases were due to credit card debt and another 18% related to personal loan repayments.

“The age group most affected by financial hardship is those between 35 and 49 years old,” Centrix said.

An uptick in hardship began in November 2022 and today’s outlook “continues a steady upward trend”, McLaughlin said.

Buy now, pay later arrears rose to 9%, up slightly on last year. Energy bills arrears are 5% higher than last year and phone bill arrears were unchanged.

Credit bureau Centrix has released its Credit Indicator for June: Financial hardship is on the rise. Photo / Centrix

On the other hand, the proportion of the “credit-active population” in arrears is a percentage point lower than last year.

Centrix said that slight yearly decrease was “reflecting ongoing year-over-year improvement”.

The number of people behind on their bills in May was 485,000, an increase of 2000 from April.

Of those, 180,000 are more than 30 days past the due date, and 81,000 are more than 90 days overdue.

Overall, 12.51% of the credit-active population is in arrears, compared with 12.43% in April.

The snapshot showed the Wairoa District in Hawke’s Bay had the highest proportion of people in arrears, at 18.3%.

The Kawerau District in Bay of Plenty was next at 18.07%, followed by the Gisborne, Ruapehu and Waitomo districts.

The Wairoa District in Hawke’s Bay had the highest proportion of people in arrears at 18.3%. Photo / Centrix

The district with the lowest rate of people in arrears was Tasman, at 8.22%, followed by Nelson City, Central Otago, Mackenzie and Wellington City in the top five.

But while arrears figures are being hailed as stabilising, company liquidations are up and there has been a recorded 14% increase in business defaults across all industries.

Business owners’ demand for credit has grown by 9% since last year. Centrix said there was a 25% increase from the retail sector, 23% in hospitality and 18% in financial and insurance services.

Company liquidations were up 27% on last year’s figures.

“[This is] partly due to increased enforcement activity by the IRD [Inland Revenue Department],” McLaughlin said.

Construction in particular “has been hardest-hit”, he said.

More than 750 building firms have been put in liquidation in the last 12 months.

“The highest rates of business failures have been seen in residential construction, property development and operations, hospitality (especially restaurants and cafés), and road freight transport,” McLaughlin said.

Raphael Franks is an Auckland-based reporter who covers business, breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.