How interest rates, asset demand and industrial events will affect the industry in 2023.
At Pickles, we believe that the 2020s will be looked back on as the decade of resourcefulness as businesses continue to navigate a tumultuous economy. As Australians entered 2023 with hope for the year ahead, they were quickly confronted with an unstable market driven by rising interest rates and economic downturn. 2023 is shaping up to be another year of challenging market conditions, but with the right business approach there is much to look forward to.
The years following COVID-19 spurred businesses to develop inventive and resourceful practices to maximise asset realisation and stay afloat. The turnover of equipment has become a deciding factor across business operations, with companies capitalising on the circular economy to offload or purchase used equipment. The businesses that will succeed in the coming years know that investing in the small, but strong pool of Australian-located assets is the most reliable way to source and sell equipment.
We believe the fluctuating market is the new norm. It is now normal to expect up to two years of delay between buying and receiving newly purchased assets, as the backlog of orders moves incrementally. But until production catches up, extremely long wait times will just be an expectation when it comes to the majority of new orders. This huge backlog has created a market that allows manufacturers to continue charging inflated prices, irrespective of an economic downturn which would be expected to push the cost of assets down. There’s simply been no need for manufacturers to bring prices down, not when the demand for assets is so high.
There are a number of factors affecting international production, including wars, fuel cost, labour shortages and a variety of shipping issues. These problems only further exasperate industries that have been impacted by impeded business operations over the last few years. Many experts believed that as the world re-emerged from COVID-19, the asset market would return to the levels we saw before 2020, but this crash never occurred. Instead prices wavered, dropped marginally and plateaued to a level somewhere in the middle between pre-2020 and COVID-19 prices.
The unstable market has become concerning for some Australian businesses, particularly given the amount of industrial companies that have ceased operation in the first few months of 2023. The quick downturn in the beginning of 2023 has resulted in a number of successful businesses being forced to close, which will increase pressure on the remaining companies, who will have an additional challenge of meeting huge demand in public and private construction. As businesses continue to be impacted by a seemingly never ending stream of market fluctuations, remarketing specialists will need to provide quick and expert advice for asset turnover. Turning over assets at the optimum time can help recuperate large portions of asset investment, or even fund new acquisitions in some cases. Whatever the circumstances, Pickles helps guide businesses through the life of an asset, and provides advice on the best times to sell.
Pickles underwent a variety of operational changes during the COVID-affected years, and used the time to transform business practices to being digitally led. Today, the majority of operations are online, although Pickles maintains a number of in-person industrial events each year. After 2 years of cancelled and postponed events, Pickles is excited about the future and driven to engage with communities in a multitude of ways. Our most anticipated industrial event for the first half of 2023 is as the naming sponsor of the 2023 Heavy Equipment & Machinery Show.
Throughout the last few years, it has become apparent that the way forward is together. As the industrial sector continues to face challenging market conditions, uplifting and engaging with the whole community is a necessity. Pickles depends on its long standing and mutually beneficial partnerships to provide clients with a range of business opportunities and solutions to meet every need. One of our longest and most prosperous partnerships has been with Civil Construction Field Days, which recently became the Heavy Equipment & Machinery Show (HEMS) in 2023.
HEMS will take over Brisbane Showgrounds from Thursday 18 to Sunday 21 of May. The rebranded show will be run in conjunction with 2023 Brisbane Truck Show, and attendees will only have to purchase one ticket to attend both events, with free shuttles between the two locations. The shows make for a natural collaboration, as many business owners in the industrial sector take an interest in the truck industry, and vice versa. To create as much fanfare as possible for the rebranded event, Pickles will be hosting a live auction onsite, showcasing a wealth of industrial assets. Featuring screens for attendees to view assets, as well as some in-person items, the auction is anticipated to draw a large crowd of industrial enthusiasts. Collaboration through events offers an opportunity for industry renewal, and a chance to remind Australian communities that the industrial sector is thriving. Pickles is thrilled about participating in the many key events that have been cancelled over the last few years.
In years of resourcefulness like 2023, we anticipate Australian businesses pursuing pedigree used assets in a move to resource their needs efficiently. We will see Australian businesses improve capital by offloading assets during periods of peak asset realisation. Buying and selling quality used items within Australia has created a thriving circular economy that keeps the country in business.
We know the value of a well-resourced country. Pickles is proud to uphold Australia’s leading marketplace. Find what you need today at pickles.com.au.