Changing Economies 2018 - CBA Equip Issue 8
(16 August 2018 - Australia) In the latest edition of Equip, CBA looks at how Australian businesses are responding to changes in the global economy, taking advantage of greater access to international suppliers, tapping into new technologies and exploring the potential of the sharing economy to help meet their equipment needs. Deep dive analysis on the Agricultural, Construction and Health sectors provide unique insight into the drivers of asset and equipment finance decision making processes based on direct interviews with 900 CFOs and corporate treasurers. In an interconnected global economy, Australian businesses are exploring innovative ways of accessing and managing the income-producing assets they need.
They are challenging existing ownership and financing models and paving the way for greater operational efficiencies. As a nation, Australia is highly exposed to – and dependent on – international trade. So it is no surprise that many Australian businesses are taking more of a global view when it comes to accessing and managing the equipment they need to drive business growth. In this edition of Equip, we look at how Australian businesses are responding to changes in the global economy, taking advantage of greater access to international suppliers, tapping into new technologies and exploring the potential of the sharing economy to help meet their equipment needs. The latest research shows that, following a long period of sluggish business investment, and driven by lower interest rates and higher confidence, more Australian businesses across most sectors and states are now looking to replace or expand their equipment instead of stretching the life of old equipment.
In the latest round of research, 72 percent said that they were in an expansionary or stable replacement mode. As they seek to access new equipment, many are actively investigating the opportunities provided by easier direct access to overseas suppliers. Just under half of businesses (45 percent) say they were already importing new assets directly from overseas or are intending to do so. As the sharing economy gathers pace worldwide, the survey also revealed widespread intention to collaborate with other businesses to share assets. 44 percent of businesses say they intend to share ownership to cut costs in the future, while 48 percent plan to share to generate extra revenue. Despite this, only a small minority are already taking part in this new ‘sharing economy‘, with just nine percent currently sharing ownership to cut costs and seven percent sharing underutilised assets to generate revenue.
Tellingly, many businesses are keen to share from a third party (62 percent) – indicating a preference for sharing other people’s assets, rather than their own. Sylvia Terry, CBA Asset Finance Managing Director, stated “This may be a sign that many firms would like to further assess the risks and reliability of sharing models before making their own assets available to others. However, the potential for businesses to boost efficiency by maximising utilisation of their equipment, makes for a compelling case. Technology is continuing to break down barriers to sharing – simplifying its management and enabling greater transparency and trust. As such, it’s increasingly likely that organisations will seek to introduce new methods for sourcing, managing and financing critical business assets.”
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