COVID Disruptions Could Spark Asset & Equipment Supply Crisis
(18 January 2021 – Australia) Construction and manufacturing based enterprises could struggle to source vital plant & equipment (P&E) such as bulldozers, generators and trucks in 2021 as COVID continues to wreak damaging global supply chain disruptions.
Slower production across the US and Europe coupled with reduced shipping to Australia are causing delays for everything from chainsaws to big ticket yellow goods. Demand for earthmoving, construction, metalworking and woodworking machinery reached record highs in 2020 as demand for agricultural equipment and generators more than doubled. However the supply of new assets & equipment is dwindling as the pandemic leads to bottlenecks in production and supply lines across the globe.
East & Partners latest 2021 Asset & Equipment Finance report, released this week and based on direct interviews with 1,300 CFOs and corporate treasurers, confirms resilient underlying demand coupled with record high asset finance switching intentions
“Demand for used equipment is expected to skyrocket this year. In some cases, sellers are moving into the hire game to maintain cash flow, a shift that is likely to become more common the longer the shipping delays continue. Online market places for machinery have been embraced more over the past year as physical contact was restricted due to COVID-19” stated Machines4U CEO Steve Krebs.
“The capital equipment game has long been a face-to-face handshake industry. But people have not been able to attend trade shows and field days and this has forced machinery sellers to move away from traditional channels and embrace digital channels. We added 100 machine dealers to our site last year compared to only 50 in past years” Mr Krebs added.