Australian construction businesses are investing into new equipment and machinery, with new data from the Commonwealth Bank showing financing up 21 per cent in May, compared with the same time last year.
The construction industry has seen significant year on year growth of excavators (up 191 per cent) and other earthmoving equipment (up 121 per cent).
The agriculture industry has also seen growth in the financing of energy efficient equipment such as lower emitting tractors (up 88 per cent) and loaders (up 73 per cent) compared to this time last year.
The Commonwealth Bank of Australia’s (CBA) Executive General Manager Business Lending, Clare Morgan, said asset financing across a number of sectors within CBA’s Business Bank continue to surge as businesses restock and invest in new assets.
“The construction industry in particular, has benefited from multiple government stimulus packages, including record investments in public infrastructure projects and the Homebuilder grant,” Morgan said.
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“We’re also seeing strong demand for vehicle financing and machinery, particularly in the food manufacturing and agriculture sectors. In fact, demand for agriculture machinery is the highest we’ve seen in several years.”
In addition, CBA found the market has responded to the Federal Government’s $1.5 billion Modern Manufacturing strategy with significant growth in welding units (up 112 per cent) and compactors (up 32 per cent) compared to May 2020.
“Government incentives have helped stimulate this growth and we’ve seen thousands of our customers take advantage of the instant asset write-off scheme over the past year alone, so it’s great the Federal Government has extended the scheme for another year,” Morgan said.
CBA vehicle asset finance trends that compare May 2021 to the same time last year, show that total car financing has increased 35 per cent, automotive repair equipment has increased 93 per cent (due to vehicle supply issues relating to the pandemic), and light commercial vehicles between 2000 to 3500 kilograms has increased 136 per cent.