If you’re on the east coast and in La Nina’s sights, the end of 2021 has already been defined as stormy. At least on the weather front! On the business front, many are relishing the easing of restrictions to finally operate at higher levels and try to recoup lost earnings from lockdowns earlier in the year. For many others, weary of the ongoing challenges of the past 2 years, it may feel like dragging yourself to the finish line and a possible holiday to refresh and recharge. But as we saw at the end of 2020, in a global pandemic, nothing is assured. So what will 2022 hold? Will we see a three-peat, a defeat or will it be sweet? We provide an end of year wrap on recent announcements around the economy and finance as a 2022 lending outlook for those looking to purchase goods with finance.
MYEFO and Half-Year Budget Updates
As is required under the Charter of Budget Honesty, the Federal Treasurer, Josh Frydenberg stepped up to deliver the Government’s MYEFO – the Mid-Year Economic and Fiscal Outlook, on 17 December. While the name may not sound like something that most would rush to read, this half-yearly budget update does give especially businesses and an indication of how the Government is performing and what its outlook is moving forward.
MYEFO is somewhat of a report on how budget measures have been implemented and performed and what adjustments the Government has needed to make to figures that were forecast and included in the May Budget.
Here’s a few points what the 2021 MYEFO included:-
- ‘Primed for lift-off’ is how the Treasurer described the economy in the lead-up to the release of MYEFO. A good sign for both businesses and individuals as we head into the New Year.
- Unemployment is expected to continue its downward trend with border restrictions eased to allow skilled workers and students from overseas to return. A good sign for business operators that have been struggling with labour shortages and have been unable to open up fully to meet demand.
- Omicron not expected to impact the economic rebound.
- Unemployment anticipated to drop to 4.5% in 2022 and further for 4.25% in the June quarter 2023.
- Real GDP growth figures expected for 2021/22 to post 3.75% and 3.5% in 2022/23.
- Specific and targeted initiatives being implemented to address the workforce shortages across many industries.
Individual states also release half-yearly updates around this time of year and businesses can look to these reports at their state/territory Treasury department for what opportunities may be available for their operation.
Interest Rates: RBA Outlook
Interest rates across all lending sectors remain at extremely low levels. The RBA has maintained the historic low 0.1% official cash rate through 2021 and that looks like continuing into 2022. Great news for those looking to purchase cars, boats, caravans, trucks and business equipment with finance.
The Governor of the RBA, Philip Lowe, recently stated that while Omicron should be viewed with caution, the rebound and recovery in the economy was expected to be sustained and continue through the summer months.
Staying totally ‘on message’, Mr Lowe repeated previous comments that the conditions to trigger a rate rise by the RBA Board – 2-3% sustained inflation and lower unemployment, were unlikely to occur in 2022.
Uncertainty around Omicron
As the year grinds to a close, the Omicron variant is an unwelcome festive visitor and certainly does not deliver cheer. But most states are sticking to their ‘lockdowns are a thing of the past’ policy and overseas studies are reported a milder but more highly transmissible variant.
With thousands of cases reported in a few days and thousands forced into iso as contacts should be addressed by business. Challenges around staffing forced into iso for 7-14 days or contracting the virus due to the high rate of transmission could leave business short-staffed.
Investing early in plant, equipment and machinery to improve productivity and efficiencies across the operation may be worth considering. Setting up the business now in preparation of what could be, is wise business management.
Supply chain issues are tipped to continue for some time and may be exacerbated by the outbreaks and reinstatement of restrictions in Europe. While a major problem for some sectors, it can present business opportunities for others to step in and step up to provide consumers with products in demand. A process which may require the acquisition of new machinery and equipment.
2020 was very much defined by the business pivot and for those continuing in this direction, speak with us about the cheap interest rated finance solutions we can provide.
Consumer Finance
Many popular makes and models of cars, boats and caravans have been in the hard-to-get category over the past years. While local manufacturers are recovering, the computer chip shortage continues to cause problems. Global supply chains and the recent events in Europe may cause that to continue.
To secure goods that are available in stock right now and avoid lengthy delays, consider speaking with us first to arrange pre-approved finance. By having your car, boat or caravan loan secured ahead of time, buyers can be better-placed to buy on the spot.
Flexible Finance a Business Essential
Regardless of what year it is, what is happening on a local or a global basis, flexible finance is an essential for business. Having access to channels which offer specialised lender and sources for cheap interest rate and tailored solutions can be a genuine life-line for many operators.
With some uncertainty around 2022, flexible business finance could be a safe-guard solution to face the potential challenges. Flexible finance that is available through Jade Finance. Engage with us early, establish the connection and be well-placed for quick and easy access to the finance required to support your business growth.
Through 2022 Jade Finance will continue to provide better interest rates and cost-effective loans and finance across our portfolio of lending markets. As the finance sector expands, we will continue to seek accreditation with new lenders to expand our range of options to deliver cheaper loans to both individuals and business.
Contact Jade Finance by phone 1300 000 008 to discuss your finance and loan requirements for 2022.
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.
