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Thursday, 25 March 2021 07:55

Aussie machinery sector booms on back of government incentive

Written by  Mark Daniel
New tractor sales in Australia look to be on track to hit the 14,000 mark for the year. New tractor sales in Australia look to be on track to hit the 14,000 mark for the year.

New tractor sales in Australia look to be on track to hit the 14,000 mark for the year.

This follows yet another record month in February, with sales up a huge 74% on the same month in 2020.

Of course, we now know that rain, ideal growing conditions and the federal government's instant asset write-off scheme transpired to see sales passing the 13,600 mark for the first time in 40 years.

Reports show that 14,000 units are likely to be surpassed if current demand continues.

Tractor and Machinery Association of Australia executive director Gary Northover says sales are now 34% higher compared with the same period last year.

"The current level of activity is even more remarkable given the strains with supply being experienced right across the supply chain," he says. "However, there are early signs that this may be improving."

Northover adds that, since mid-2020, the supply of product from manufacturing facilities in Europe, the US and Asia has been heavily impacted by the Covid-19 lockdowns and social distancing requirements.

"An indicator of this is the amount of shipping activity being seen through Australian ports, which is reported to be around 40-50% of normal capacity in the middle of last year. This has now improved to around 90% of normal capacity."

Looking at the regions in more detail, year-to-date sales in NSW are 107% more than 2020, Victoria 43% more, Queensland 62% more, while Western Australia is 72% ahead of last year.

Increases appear to be spread evenly across the four reporting categories, with the under 40hp range up 73% year-to-date. The 40-100hp range is up 63%, the 100-200hp category 50% up and the 200hp+ sector now 110% ahead of last year.

Until recently, the latter category had been hit hard by supply issues. However, the backlog of orders is now being addressed.

Industry sources are suggesting that they expect to see a continuation of this strong demand at least until the Government's instant asses write-off scheme expires on June 30.

Agriview's Alan Kirsten says the exceptional year is not just limited to tractors, but machinery in general has been in high demand.

"In dollar terms, that's just under $2.7 billion worth of machinery was retailed, which is up 14% on 2019," he explains. "When you add in the value of parts, service and a clean out of second-hand gear, the total comes to around $4 billion - and that is a huge result."

Kirsten adds this is especially so considering that by mid-year 2020, stock levels had been run down and availability was looking like it might be an issue.

Greg Crawford - country manager Australia/New Zealand for De Lage Landen - expects the coming 12 to 24 months to be relatively buoyant on the back of farmer and dealer confidence.

"Of course, this will depend on the virus outcomes in Europe and America and what effect that has on production as well as shipping to Australia and New Zealand," he says.

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