Bank data shows business is pouring funds into expansion
Businesses were investing heavily in equipment in record numbers showing that there was strong economic expansion underway, according to the National Australian Bank.
ABARES says Australia is headed for a record winter crop production despite some destructive weather. (File image)
It said its data showed businesses across Australia are purchasing new equipment and vehicles in record numbers as companies embrace the strongest market conditions seen in years.
The most in-demand items were also indicators that the agricultural sector was showing renewed confidence.
Tractor purchases were up 146 per cent year-on-year, according to NAB. Irrigation equipment was up 217 per cent, earth moving equipment was up 133 per cent and forklifts were up 216 per cent.
There was also an indicator that businesses were not all about making money and that staying awake was also important. Coffee machines were up 155 per cent.
NAB said Australian businesses were investing to build on the opportunities uncovered.
“Overall, NAB’s agricultural equipment finance sales are up 130 per cent year on year (YOY) in 2020, demonstrating real strength across regional Australia while industries like manufacturing have also increased 130 per cent YOY,’’ NAB executive of regional and agribusiness Julie Rynski said.
She said customers were taking advantage of strong business conditions and confidence while the Government’s Instant Asset Write Off Scheme had been key to stimulating investment.
“When businesses start purchasing equipment, it’s a real signal to us that farmers and regional businesses are in a phase of growth and expansion,” Rynski said.
“With business confidence at an all-time high and businesses building on things they’ve learned through the pandemic, I’m not surprised that equipment sales are so high.
“The majority of farmers and regional businesses have proven to be exceptionally resilient through two years of challenging conditions and are now poised to capitalise on new opportunities and brilliant market conditions.”
Rynski said the bank did not expect the current demand for equipment finance lending to ease any time soon.
“If we continue to have favourable seasonal conditions, we expect this level of investment in agricultural equipment to continue for the next 15 months,” Rynski said.
“As Australia’s largest agribusiness bank, NAB is focused on continuing to support the sector to maximise growth and contribute to the economy.”
