Had another look at the building consents issued over time - and there appears to be some annual cycle:
A low in December / January (makes sense - holidays)
A smaller high in February / May (catching up after the holiday period?)
A low in June (I reckon builders are too busy to finish the projects they promised to finish before winter to help with planning tasks)
A high from July to November (bad weather motivates builders to look after new clients instead of finishing building projects)?
This means - I expect May and more so June numbers not looking too flash, but from July the building permits should go up again.
Coincidently - this annual cycle appears to be correlated with MPG's annual SP cycle. Just an accident?
Last edited by BlackPeter; 04-06-2017 at 02:23 PM.
Reason: corrected the scale after month by month analysis
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"Prediction is very difficult, especially about the future" (Niels Bohr)
Had another look at the building consents issued over time - and there appears to be some annual cycle:
A low in November / December / January (makes sense - holidays)
A smaller high in February / March (catching up after the holiday period?)
A low in April / May (I reckon builders are too busy to finish the projects they promised to finish before winter to help with planning tasks)
A high from June to October (bad weather motivates builders to look after new clients instead of finishing building projects)?
This means - I expect May numbers not looking too flash, but from June the building permits should go up again.
Coincidently - this annual cycle appears to be correlated with MPG's annual SP cycle. Just an accident?
Monthly numbers are pretty volatile - better to look at the seasonally adjusted series (at least smoothed out a bit) or even the trend series
Still reckon that annual rate of change numbers give a better idea where things are heading.
... they are, but it is still possible to see patterns. However - somewhat contradicting myself : I added the data from some more years to my stats and the shape slightly changed (just moving the windows a bit around and flattening the first peak). I modified subsequently my post above (it appears - too late, you responded already to the first one).
But why describing it anyway with many words - here is the graph: NZBPpermonth.JPG
Building Permits (x-axis) are average number of permits in the relevant month over all months in above time window and are dwellings including apartments.
And of course - this seasonal variation is overlain by the annual trend
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"Prediction is very difficult, especially about the future" (Niels Bohr)
BP -you said ".Coincidently - this annual cycle appears to be correlated with MPG's annual SP cycle. Just an accident?"
You should overlay the 'cyclical' nature of the MPG share price to see what it looks like
Are you sure?
Thanks for responding to my rhetorical question . They do correlate .... however, given that MPG is only listed for 3 years or so and influenced as well by other things than the annual building consent cycle, are the data points so far not really statistically relevant. Anyway - DYOR.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
Thanks for responding to my rhetorical question . They do correlate .... however, given that MPG is only listed for 3 years or so and influenced as well by other things than the annual building consent cycle, are the data points so far not really statistically relevant. Anyway - DYOR.
Still not sure what you are trying to show - was it if consents go up in May (after a bad April) the MPG share price will go up or something alonmg those lines
That chart on Page 4 of latest presentation is interesting - it shows the relationship between consents lagged 9 months.
If we use the December consents figure 0f 30,066 then we should expect MPG annual NZ enues to be about $220m - an increase of $6.2m since March which implies H1 revenues of $117.9m which is an increase of 5.5% on H1 last year.
Would this keep the market happy? Of course they still have a few extra months of Aussie sales to add to growth could hide a slowing down in revenue growth in NZ
Interestingly the title of that chart has changed since the previous presentation. Six months ago they said -
' NZ revenue remains aligned to 9 month lagged NZ housing consents –but the relationship is continuing to diverge over time as Metro Glass’ mix includes an increasing proportion of commercial and Retrofit revenue'
Wonder they left the bit in red off this time around
Last edited by winner69; 05-06-2017 at 08:04 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Still not sure what you are trying to show - was it if consents go up in May (after a bad April) the MPG share price will go up or something alonmg those lines
Apologies - appear to be not so easy to communicate the things one have in one's head ...
I did above analysis to get some feeling for seasonal changes in building permits and whether (and how) they correlate to the MPG share price.
At this stage I think (based on limited data) that the SP is more correlated with the announcement of the building consents (i.e. 1 to 2 months after the consent) than with the actual business (9 months after the consent). What this means in practical terms is that based on this observation I expect the MPG share price to be soft for another roughly 2 to 3 months (give or take some weeks) and then, assuming consents increase again in July (i.e. announced early September) I expect it to go up culminating around the November HY report.
What happens after November should be then dependant on whether they manage to get their new gear (and with that margins) under control - and what happens during the next big installation phase of new equipment over Christmas.
Clear as mud?
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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Originally Posted by BlackPeter
: I added the data from some more years to my stats and the shape slightly changed (just moving the windows a bit around and flattening the first peak). I modified subsequently my post above (it appears - too late, you responded already to the first one). 
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