The economic statistics, information and commentary continued to flow this past week, presenting more intel for businesses considering their prospects of acquiring new assets with equipment finance. Overall it’s been an extremely significant and busy start to the year in regard to economic indicators which can impact interest rates, finance and business decisions.
In mid-January the Australian Bureau of Statistics (ABS) reported the inflation rate for the December quarter with an unwelcomed uptick. The Reserve Bank of Australia (RBA) followed up on its previous indications with another 0.25% increase to the cash rate in early February.
This past week, the ABS has revealed that unemployment has also risen. Unemployment has been falling and remained steady over recent months at lows not seen for around 50 years. Making it extremely hard for businesses to fill staff rosters. In January, unemployment actually rose by 0.2% which has attracted attention.
This uptick may be seen as a positive sign by some but a negative in other circles. Either seen as an easing in what has been an extremely tight labour market. Hence, offering better prospects of hiring the staff required.
On the possible downside, could it be the sign of high interest rates and high inflation biting and a portent of a recession? Being statistics for a very seasonal period – January, the figures may simply be seasonally-affected data.
To add even further interest to the economic week, RBA Governor, Philip Lowe, fronted two committee hearings in Canberra.
Governor Lowe responded to a question from a committee member re the latest unemployment rate. He responded that the rate was expected to rise further as higher rates of unemployment were the costly outcome of driving high inflation down.
The RBA did mention in a number of monetary statements last year, that it expected unemployment to rise and actually quoted statistics for the Board’s outlook.
We cover off on the latest statement from the ABS and how we can assist operators looking to proceed with acquisitions through our cheaper equipment finance.
January Unemployment Data
On 16 February the ABS posted the latest employment data covering the January reporting period. This revealed an increase to 3.7% in the unemployment rate. Bjorn Jarvis, the ABS Head of Labour Statistics, said that the number of people unemployed increased by 22,000 and the number employed fell by close to 11,000. The result being an increase in the unemployment rate.
This was noted as the second consecutive reporting month that the unemployment rate had increased. But Mr Jarvis said that this result was on the back of strong growth in employment through last year.
The seasonal aspects of the data was detailed. Mr Jarvis noting the tendency for exiting jobs late in a year to take a break before starting new roles early in the following new year. Thus impacting the January data. It was noted there was a greater number of people indicating that was their situation than was usual for this time of year.
Not mentioned in the statement from the ABS, but an observation – the above trend could reflect individuals taking up better opportunities in what, in many sectors, has become an extremely competitive jobs market.
The figures for numbers of work hours lost due to illness have returned to more normal levels. This should be a relief for many employers who have been dealing with workers off sick with the waves of COVID.
The participation rate dropped to 66.5% for January and underemployment stayed at 6.1%. There was a fall in employment in full-time jobs and a rise in part-time work. The latter representing 30.2% of the total employment figures.
Proceeding with Equipment Finance for New Machinery
Individual businesses will have varying reactions and responses to the January unemployment report, depending on the specific outcomes in different industries and sectors. For businesses that see the latest unemployment figures as encouraging to proceed with new acquisitions, Jade Equipment Finance can assist with cheaper finance.
The encouragement may come from the prospect that more people are now looking for work. Providing the possibilities of hiring to fill jobs in the business and enable the operation to return to full capacity.
We full appreciate the pressures that businesses have been enduring due to the tightness in the labour market as well as from rising costs due to inflation and global supply issues. We assist by sourcing workable, cost-effective equipment finance at the cheapest rates.
Cheaper rates can be found across our range of finance products – Leasing, Rent to Buy, Chattel Mortgage and Commercial Hire Purchase. Note that temporary full expensing is due to expire on 30 June. Machinery, plant and equipment needs to be operating in the business before that date to be considered an eligible asset by the ATO. Chattel Mortgage is considered the most suitable choice of loan type for that purpose.
For those yet to make a final decision on new acquisitions, more information on the economy and rates is due in coming weeks. The minutes from the RBA February Board meeting are due on 21 February, the next rate decision on 7 March and the latest Wage Price Index from the ABS on 21 February.
For cheaper interest rates on equipment finance, contact Jade Equipment Finance on 1300 000 003
DISCLAIMER: IF MISINTERPRETATIONS, MISREPRESENTATION OR ERRORS EXIST IN THIS ARTICLE, NO LIABILITY IS ACCEPTED. THE INFORMATION IS PROVIDED ONLY FOR GENERAL PURPOSES AND NOT IN ANY MANNER INTENDED AS THE ONLY SOURCE FOR MAKING FINANCIAL DECISIONS. THOSE THAT CONSIDER THEY REQUIRE ADDITIONAL GUIDANCE OR ADVICE SHOULD REFER TO AN INDEPENDENT FINANCIAL ADVISOR.