The coronavirus has changed lives and businesses with the long-term impacts still to be determined. But throughout the COVID-19 crisis in Australia, many sectors have continued to operate, with some necessary changes to procedures. These businesses look to have further opportunities to stay strong and thrive as Australia moves along and towards the other side of the metaphorical bridge that Prime Minister Scott Morrison constantly refers to.
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The construction, mining and transport sectors are notably operating pretty much as normal and Jade Equipment Finance has also been ‘business as usual’ throughout the crisis.
We’ve also witnessed many manufacturers pivoting their operations to produce different products to deal with a drop in demand for their current lines. Staging companies now making desks, alcohol producers making hand sanitiser and many businesses swinging into action to produce PPE to supply our frontline medical staff.
Some manufacturers have needed to ramp up production of consumer goods to cater for panic-buying and hoarding purchasing behaviour.
We have fielded many calls from businesses for equipment to cater for these new ventures and expanded operations and will be available to handle your equipment finance needs at all times.
With the all-important national COVID-19 curve flattening somewhat faster than authorities envisaged, businesses are now looking ahead of the curve and wondering what business will look like on the other side of the bridge.
We explore the opportunities that we see for our equipment finance customers.
Opportunities on the other side of the bridge
Businesses are understandably nervous about investing in equipment in the current uncertain economic environment. On one hand, the RBA and other economic forecasters are predicting unemployment levels not seen for decades and a long recovery. On the other hand, key sectors have been flagged as the way out for Australia in the recovery phase.
Construction is already being talked about as a key player in the recovery phase. In particular government infrastructure projects. So companies with contracts on these projects and their supply chains, are experiencing a level of optimism with increased financing for construction equipment.
Transport has been experiencing a surge throughout the coronavirus crisis with an increased demand for delivery services and to ensure supply chain continuation of both consumer goods and essential supplies requiring businesses to invest in transport equipment.
As lockdown restrictions continue to be eased, schools resume and more and more workers return to their normal place of business rather than working from home, the retail sector should see a return of business also. All good signs for manufacturers of consumer goods.
After being in lockdown for such an extended period, many Australians will be keen to get into the outdoors and make up for lost time with shopping and engaging in their sport and recreational activities. With international travel off the agenda for some time, we forecast a growth in interstate and intrastate travel and opportunities for businesses in these sectors.
The conversation around ‘sovereignty’ and ‘national self-reliance’ is growing louder and it is an interesting one. Going back a very long way, manufacturing in Australia essentially died as it could no longer compete with cheap overseas imports. Manufacturers moved to an offshore business model in increasing numbers. The benefit was cheaper prices for consumers. But during the COVID-19 crisis, weaknesses in our supply chains were clearly exposed.
There is now a move to restore a lot of local manufacturing, especially in the production of essential supplies to reduce the reliance of overseas suppliers.
All these plans, ideas and predictions provide opportunities for investment in equipment.
Investment opportunities
For construction, transport and manufacturing businesses considering investing in new equipment, it may be worth acting promptly to take advantage of the Federal Government Instant Asset Write-Off (IAWO) measure. This was announced as part of the coronavirus stimulus package for business.
The threshold for eligible asset purchases under Division 40 of the Taxation Act has been increased from $30,000 to $100,000 for assets purchased and operational by 30 June 2021, for eligible businesses.
With current equipment finance interest rates currently at very low levels, this will make Equipment Leasing even more attractive to many of our customers.
We certainly hope our outlook is on the money and we’re here, as always, to assist you to take advantage of any opportunities you can with cost-effective equipment finance.
To discuss your equipment finance requirements, contact us on 1300 000 003 to speak with a Jade Equipment Finance consultant.
DISCLAIMER: THE INFORMATION PROVIDED IS FOR GENERAL CONSIDERATION. ANY REFERENCE TO OFFICIAL GOVERNMENT POLICIES HAS BEEN SOURCED FROM AUSTRALIAN GOVERNMENT AND STATE GOVERNMENT SOURCES. NO LIABILITY IS ACCEPTED FOR ANY ERRORS IN THE PRESENTATION OR INTERPRETATION OF THE FACTS AS PROVIDED BY THESE SOURCES. WE ADVISE ALL INDIVIDUALS AND BUSINESSES TO REFER TO THEIR ACCOUNTANT OR FINANCIAL ADVISOR FOR PROFESSIONAL ADVICE SPECIFIC TO THEIR INDIVIDUAL CIRCUMSTANCES.
