There is a notable shift in what interests investors
A new report has revealed that Australian businesses have significantly increased their investment in vehicles and equipment over the past year despite economic uncertainties. According to new data from the Commonwealth Bank of Australia (CBA), there has been a 22% rise in vehicle and equipment financing compared to the same period last year.
The report highlights a notable shift towards greener assets, with electric vehicle (EV) fleets experiencing a threefold increase of 325% and hybrid vehicles rising by 120%. Small businesses are at the forefront of this green transition, leveraging CBA’s Green Vehicle and Equipment Finance to boost electric vehicle financing by 346% in this sector.
Manufacturers have also ramped up their investments, with a 24% increase in funding for manufacturing and industrial equipment, including manufacturing lines, forklifts, and scissor lifts. The investment surge is particularly strong among regional manufacturers and agribusinesses, which saw a 42% year-on-year rise, primarily in moulding machines, packing and cutting machines, silos, and other food manufacturing machinery.
Grant Cairns (pictured), CBA’s executive general manager of business lending, attributes the broad-based increase to post-COVID business growth and a strategic shift towards energy efficiency.
“Business confidence remains strong despite economic headwinds from higher rates and inflation, and we are seeing growing investment in assets across agriculture and manufacturing, supported by an improved supply chain landscape in a post-COVID world,” Cairns said. “Companies are also stepping up investment in the energy transition, with more businesses looking to improve their energy efficiency through equipment upgrades or the increased adoption of electrified transportation and replacement fleets.”
Government scheme boosting the trend
Cairns noted that part of this shift is driven by businesses capitalizing on government rebates and subsidies, aiming for long-term cost reductions and returns on investment.
“We welcome the extension of the Federal Government’s instant asset write-off scheme (IAWO) as a way to help free up cash flow for small businesses. As small businesses lean into the energy transition – as evidenced by the sharp increase in green asset financing over the past year – government support such as the IAWO could help propel this trend,” he said.
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