Staying across movements in the economy has become increasingly important for business owners in making crucial decisions around asset acquisitions. While always important, the recent decisions by the Reserve Bank of Australia (RBA) to hike interest rates in response to soaring inflation has highlighted this. The Bank considers all relevant economic data including inflation and the unemployment rate when making its decisions.
Businesses looking to make their own decisions, especially those involving finance, may also consider the latest data to form their forecast and outlook for their operation. It may sound like a time-consuming or challenging task. But much of the relevant data is easily accessible – free and online, and presented with overviews and summaries to easily understand.
The Australian Bureau of Statistics (ABS) reports on a wide range of trends and statistics in the Australian economy. In January, the bureau reported on the inflation data for the quarter ending December. A result which was probably the key reason for the latest RBA rate rise.
On February 16, the ABS released the employment statistics covering the reporting period in January. With the labour market in Australia extremely tight due to pandemic-related issues, staying across movements can be particularly relevant to business operators in many sectors.
The difficulties in filling jobs have been restricting many operators from achieving full capacity operation and outcomes. Any sign of an easing in that respect, may improve the outlook and provide reason to proceed with asset acquisitions such as vehicles, trucks, plant, machinery and equipment.
January Unemployment Rate
The unemployment rate has dropped significantly in the past two years due to a number of factors but most notably the lack of overseas workers as a result of pandemic border restrictions. But for the January reporting period, the rate increased.
A rise in unemployment was mentioned in RBA rate decision statements as being expected and was also expected by the Department of Treasury.
The ABS announced in a statement posted to its website that the rate increased from 3.5% to 3.7%. The rate reflects a fall in the number of employed people of 11,000 and an increase in those unemployed of 22,000.
As noted by Bjorn Jarvis who is the Head of Labour Statistics with the ABS, this is two months consecutively that the unemployment rate has increased. Also noted by Mr Jarvis is the significance of the reporting period – January, in regard to seasonal factors. The end of and start of a calendar year is a popular time for people to leave jobs before starting new ones after a break. According to Mr Jarvis, more than the usual number of people reported that this was their situation - they were currently unemployed but had jobs to start in the near future.
There has been intensive competition for labour in many industries. Reports of very attractive offers being made to attract workers to different jobs and companies. This larger than usual number of people changing jobs may reflect that competition.
While further waves of COVID-19 are expected by health authorities this year, the ABS reports that the number of people off work due to illness had returned to the average range. This will be welcomed by many employers, especially those already struggling to fill jobs.
The data also shows a fall in the participation rate – 66.5%, and the rate of underemployment at a steady 6.1%. Full-time employment fell while part-time rose. Part-time employment comprises 30.2% of the total employment.
Outlook positive? Access Cheaper Finance for Acquisitions
If the January unemployment rate represents a more positive outlook for the business – the prospects that staff may be more readily available, speak with us about cheaper finance for new acquisitions. Even where the prospects for individual labour requirements are looking better, the cost of new finance remains critically important. Inflation remains extremely high, driving up and/or sustaining high costs of materials and other business expenses.
Any new finance must be cost-effective, work with cash flow and that means at the cheapest interest rates. For businesses that see the latest unemployment rate as reason to invest in new assets, Jade Finance can assist with cheaper business finance interest rates.
If you're in the market for equipment finance, you may be feeling the impact of the Reserve Bank of Australia's recent cash rate increase. But fear not, because at Jade, we have access to a wide range of lenders, including specialist non-bank lenders, that enable us to quickly and efficiently find the cheapest interest rates available. This not only saves businesses time, but also money - a win-win situation!
And it's not just equipment finance that we offer competitive rates on - our entire finance portfolio, including Chattel Mortgage, Leasing, Rent to Own, and Hire Purchase, boasts some of the most affordable rates in the market. For those looking to start a new business in 2023, we even offer No Doc and Low Docs options to help you get up and running sooner.
Business owners should take note that the RBA has indicated that rates are likely to rise again, possibly as soon as the Board's meeting on 7 March. That's why we urge you to contact us promptly to get approved for new finance and secure the best rates possible. With our access to a wide range of lenders and commitment to finding the cheapest interest rates, we're confident that we can help you get the financing you need to take your business to the next level. So why wait? Click here to learn more about our equipment finance rates and financing options.
If the latest unemployment rate is a positive sign for your business, contact Jade Finance 1300 000 008 to assist with finance on new asset acquisitions.
DISCLAIMER: NO LIABILITY IS ACCEPTED IF ERRORS OR MISREPRESENTATIONS ARE FOUND IN THIS ARTICLE. THE ARTICLE IS PREPARED AND PRESENTED FOR GENERAL INFORMATIVE PURPOSES AND IS NOT INTENDED TO BE THE SOLE SOURCE OF INFORMATION FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING GUIDANCE AND ADVICE SHOULD CONSULT A FINANCIAL ADVISOR.
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