Australian companies have stepped up their investment plans over the past 12 months, despite the slowing economy. Data from the Commonwealth Bank of Australia shows a 22% year-on-year increase in vehicle and equipment financing.
The new figures show that a record number of companies are financing greener assets. The number of electric vehicles has more than tripled (325%) and the number of hybrid vehicles by 120%. Small companies are leading the way in this area. Specifically, they are using CBA’s Green Vehicle and Equipment Finance, which has seen electric vehicle financing increase by 346%.
Manufacturers are also increasing their investments in new assets. There is a 24% jump in financing of manufacturing and industrial equipment, such as production lines, forklifts and scissor lifts. Financing activity was particularly strong among regional producers and agricultural companies (+42%). This is led by the purchases of forming machines, packaging and cutting machines, silos and other food production machines.
Grant Cairns, CBA’s Executive General Manager Business Lending, says the broad-based increase reflects business growth post-coronavirus. And there is evidence that companies are evolving their models to invest in energy efficiency improvements.
“Business confidence remains strong despite economic headwinds due to higher interest rates and inflation. We are seeing increasing investment in agricultural and industrial assets. This will be underpinned by an improved supply chain landscape in a post-Covid world,” said Cairns.
“Companies are also increasing their investments in the energy transition. More and more companies are looking to improve energy efficiency through equipment upgrades or greater adoption of electrified transportation and replacement fleets. Part of this shift is driven by customers taking advantage of government rebates and subsidies.”
“Australian Businesses Drive Asset Investment: CBA” was originally created and published by Retail Banker International, a brand owned by GlobalData.
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