The conclusion of 2021 has introduced a fresh development in the COVID-19 pandemic - the emergence of the Omicron variant. While its impact is still relatively in its early stages in Australia, it is already having significant effects in other parts of the world. Similar to the introduction of the Delta variant, the appearance of a new variant can introduce uncertainty for businesses regarding their operational decisions. Just as the Australian economy had started to recover from the challenges posed by the Delta variant, the question arises: how will the Omicron variant impact this recovery? We have compiled a range of considerations stemming from both local and global events to shed light on how the effects and outcomes of Omicron could influence Australian businesses, particularly in terms of potential opportunities that may arise.
Global Omicron Reactions
Reports indicate that the Omicron variant has been identified in as many as 89 countries. Although it has been suggested that Omicron might cause less severe illness compared to Delta, its rapid transmission rate is causing alarm. Numerous European nations are taking preventive measures by reintroducing lockdowns and reinstating specific restrictions. The Netherlands is among the latest countries to implement a Christmas lockdown.
These responses could potentially impact overseas manufacturing facilities, many of which are still grappling with computer chip shortages and the lingering repercussions of shutdowns in 2020 and 2021. This situation could potentially affect the accessibility of components and supplies for Australian businesses, creating challenges for some operators.
On the positive side, as has occurred during 2020 and 2021, the situation could mean business opportunities for local manufacturers and suppliers to step-up to supply the local demand. The Federal Government’s Modern Manufacturing Strategy could be worth re-visiting to see what opportunities may present for your sector. Possibly reason to invest in new vehicles.
Global Supply Chains
Experts in the retail sector are projecting that delays and disruptions in global supply chains may persist, potentially extending into 2024. While this presents challenges for the retail industry, it could offer opportunities for local businesses to meet consumer demand gaps. Reduced imports might lead to increased local consumer spending, thereby driving greater demand for transportation and logistics services.
Shipping challenges have also emerged, impacting both imports and the supply of materials and components. If these challenges are affecting your truck business, they could prompt a reconsideration of your truck finance arrangements.
Construction Sector Upticking
Recent data from sources within the construction industry indicates that the sector is maintaining its robust growth and transitioning back to more typical conditions. NSW Premier Dominic Perrottet's acknowledgment that the shutdown of the construction sector in NSW was an error could suggest a more stable future for those involved in construction.
The substantial investment in infrastructure projects is continuing at an impressive pace. Having the appropriate vehicles that align with project specifications positions operators favourably to secure profitable tenders.
State Border Restrictions
The past two years have presented significant challenges for transport operators due to closures, permits, and restrictions at state borders. Fortunately, many of these limitations have been alleviated or removed, particularly for the crucial Queensland-NSW-Victoria route.
While it seems that lockdowns are becoming less frequent, transport operators can hopefully gain a clearer understanding of their investment needs for the future, despite the emergence of the Omicron variant. However, it's important to note that Western Australia's situation remains dynamic and subject to frequent changes in terms of permits and regulations.
Truck Loan Take-outs
It may be quite a natural reaction to hold-off on major business investment decisions such as truck loans to see how Omicron plays out. However, purchase procrastination could leave businesses behind the 8 ball in capturing opportunities as they emerge as a result from global events.
Courtesy of the RBA holding the cash rate at 0.1% for over 1 year now, truck loan interest rates remain at extremely low rates, even on our Jade Truck Loans cheap rate scale! With fixed interest rates available across our truck loan products, astute operators that buy now with a fixed rate loan can take advantage of the low interest rate scenario for the full up to 7 year term of that truck loan. A situation which can assure certainty for truck loan repayments over a longer, possibly uncertain time ahead.
The significant tax deductions available through temporary full expensing and loss carry back are still on the table for eligible businesses and eligible asset investments such as new trucks. For businesses with their eye on this measure, think Chattel Mortgage for truck & trailer financing. This loan product suits accelerated asset depreciation measures as the truck ownership immediately transfers to the balance sheet of the borrower.
Another viewpoint to consider is possibly refinancing truck finance balloon or residual to achieve lower repayments and contain any impacts on cash flow which may eventuate as a result of Omicron. While there are costs to consider when refinancing, if the objective is to reduce monthly outgoings with lower truck payments, then it could be worth speaking with us to discuss the options.
The Omicron and in fact the general COVID-19 scenario is a constantly changing and evolving situation which can have potential impacts for businesses. Being able to easily and quickly source cheap truck finance through connecting with us can be even more beneficial in such times.
Contact Jade Truck Loans on 1300 000 003 for cheap truck finance.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.