A surge in Bankwest asset financing figures has revealed the resilience of the state’s agriculture sector as it begins 2021 brimming with confidence, despite last year delivering COVID-19 and trade uncertainty.
Bankwest data has shown a doubling in value (100%), and 75 per cent increase in volume year-on-year of asset financing for farming equipment across the agriculture sector in the first half of the financial year.
The growth was highlighted by a booming first quarter (Jul-Sep) of the financial year (FY21), with a 123 per cent lift in value, and 122 per cent increase in volume compared to the same period last year.
The second quarter (Oct-Dec), while not as strong as the opening quarter, remained well above the previous financial year’s performance, increasing 78 per cent in value, and 36 per cent in volume.
The top-five equipment purchases behind the increases were (in order of most to least common): harvesters; tractors/telehandlers; seeding equipment; spraying equipment; and bins (field/chaser).
Bankwest Head of Rural and Regional Banking Greg Strapp said the surge in asset financing made Bankwest cautiously optimistic for the WA agriculture sector in 2021.
“2020 challenged us all in various and unique ways, but it’s clear that a combination of market factors has given farmers enough confidence in the outlook for 2021 to spend on both new and used equipment.
“Very low interest rates, the RBA Term Funding Facility, the Instant Asset Write-Off scheme and COVID’s relatively low impact on WA are all helping the sector, along with the strong harvest.
“2021will present challenges of its own, and China’s tariffs on Australian products such as barley, rock lobster, and wine will place diversification pressures on the industry – particularly for the latter two products.
“However, 2020 and the asset financing data has showed us how WA farmers are resilient and adaptable and, while it’s important they receive the support they require, we’re cautiously optimistic for the road ahead.”