Economic Outlook and Government Measures Update

Despite many industry sectors still on the back foot in regard to COVID-19 recovery and many waiting to see the outcomes of the conclusion of JobKeeper at the end of March, there are many encouraging signs across many sectors of the economy.

December Quarter Figures

In late February it was a quite impressed and no doubt relieved Federal Treasurer, Josh Frydenberg, who announced the economic data for the December 2020 quarter. The Treasurer reveals that the economy had grown 3.1% in the quarter and had recovered 85% from the ‘COVID drop’. He said the outcome was much faster than expected and had beaten expectations. He said there were still sectors and regions doing it tough but a strong broad-based recovery was underway.

The Treasurer quoted specific figures including 320,000 new jobs added, consumption up 4.3% and business investment up 2.6%. He noted that the investment was very much related to equipment and machinery investment with both business and consumer confidence back to pre-COVID levels.

Mr Frydenberg said the country begins 2021 in a strong position, retaining the AAA credit rating and noted that the recovery plan is working, though acknowledging that the job was no done and challenges lay ahead.

Overall, the economy has had two consecutive quarters of GDP growth and real GDP is better than forecast.

Government Measures Extended

In early March, as part of the Government’s National Economic Recovery Plan, the Prime Minister Scott Morrison announced that the job subsidy scheme would be extended. This targeted measure was introduced in 2020 and provides subsidies to businesses to employ apprentices and traineeships. Many of our Jade Equipment Finance customers rely on apprentices and trainers as an integral part of their businesses and this should be welcome news.

This Boosting Apprenticeships program is part of the overall focus of the Government on training, skills and jobs and will now be extend to include new trainees and apprenticeships that are signed on by 30 September 2021.

In making the announcement, the Prime Minister acknowledged that although the just released national accounts indicated that the economy was on the comeback, businesses continued to need support and apprentices and trainees needed these types of opportunities.

If you’re considering taking advantage of this scheme in taking on new apprentices and trainees in your trade, engineering, construction or machinery business and you require new equipment to cater for the intake, speak with us about finance solutions. An increase in staffing, even at trainee level, may be an opportunity to increase productivity and output if matched with the right equipment acquisitions.

Construction Sector Figures

The construction sector activity is reported in part with the Australian Industry Group and Housing Industry Association monthly reports. A recently released report put the apartment showing some expansion following several years of sluggish performance. The Australian PCI, which is the Performance of Construction Index, eased by 0.2 points in February but still show a reading of 57.4. Apparently a reading in excess of 50 indicates activity expansion.

The report indicates a bounce back particularly in the apartment sector while growth in the housing area had record highs for the index.

All potentially good signs for our customers in the construction sector and with Instant Asset Write-Off still in play for eligible businesses and interest rates remaining low, the right time could be NOW to invest in new construction machinery. To calculate repayment estimates to assist your budget planning, use our equipment loan calculator. Enter the loan amount, which can be 100% of the purchase price, loan term preferred and the correct interest rate for the finance product you’re interested in and the calculator does the rest. For a quick firm quote, give us a call.

Breaking News …Support for the Aviation Sector

As we prepare this article, news has broken that the Government is launching a support package to assist the aviation and tourism sectors. Due to the international travel bans, these sectors have been especially hard hit by COVID and many fear for the future of many businesses when JobKeeper expires at the end of March.

This new initiative will come into effect from 1 April 2021 and involves a scheme whereby the Government subsidies air travel tickets to boost domestic travel and tourism. Initial reports state this is a $1.2 billion package with a number of elements. We’ll research the detail when the full measure is announced and provide an update of the take-outs.

Moving Forward with Equipment Investment

From our point of view, lending rates remain low and we continue in a good position to source cheap equipment finance for a wide range of business, industrial, construction, manufacturing and other equipment across all indiustry sectors.

Contact Jade Equipment Finance on 1300 000 003 to discuss your equipment finance requirements.

DISCLAIMER: THE INFORMATION IN THIS ARTICLE IS PREPARED SOLELY FOR INFORMATION PURPOSES AND IS NOT INTENDED AS FINANCIAL ADVICE OR AS THE SOLE BASIS FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING ADVICE SHOULD CONSULT A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATIONS OF PRODUCTS, POLICIES AND INFORMATION OR ERRORS IN THE CONTENT AS REFERRED FROM OTHER SOURCES.