A record number of Australian businesses invested in new equipment and machinery last financial year, according to lending data from the Commonwealth Bank (CBA).
In FY22, CBA recorded the largest volume of new asset finance lending in the bank’s history, with businesses in agriculture, manufacturing, and production driving demand for equipment and machinery.
Assets such as forklifts (up 49 per cent), trailers (up 37 percent), cranes (up 26 per cent) and trucks (up 13 percent) topped the list.
Mike Vacy Lyle, CBA Group Executive Business Banking, said this growth in FY22 suggested most businesses were still positive about the future notwithstanding the impact of rising costs and constraints in supply chain.
“Australian businesses have proved resilient as we’ve adjusted to living with Covid-19,” Mr Vacy-Lyle said.
“Many have increased their investment in productive capacity to strengthen their businesses and are taking positive action to overcome issues including supply chain disruptions by refining procurement processes and asset management.
“This led to significant investment in new vehicles, equipment and technologies in FY22. Businesses are continuing to adapt their strategies in response to the changing operating landscape and ongoing uncertainties in the domestic and global environment.”
Largest new lending growth in FY22 (compared to FY21) by asset type:
- Forklifts +49 per cent
- Trailers +37 per cent
- Cranes +26 per cent
- Trucks +13 per cent
- Agriculture +11 per cent (eg harvesters, headers and all-terrain vehicles)
- Prime movers +11 per cent
The increase in funding for construction equipment and construction vehicles was largely driven by business demand in New South Wales, Queensland and Western Australia.
- In NSW there was a 93 per cent jump in finance for earthmoving equipment along with a 27 per cent rise in funding for trucks
- There was an 18 per cent increase for agriculture equipment in Victoria
- In Queensland there was a 39 per cent rise in finance for earthmoving equipment
- In Western Australia, funding for earthmoving equipment increased 22 per cent while there was a 42 per cent rise in finance for trailers and heavy haulers
Mr Vacy-Lyle said CBA was delivering a range of fast lending solutions for businesses. This includes its innovative lending platform, BizExpress, and Stream Working Capital, which removes the need for traditional fixed assets such as property and provides cash flow using outstanding invoices.