Fleet investment optimism is strengthening: VTA


Covid Insights survey shows owners refuse to be cowed by pandemic

Fleet investment optimism is strengthening: VTA
Peter Anderson

 

Growing optimism amongst Victorian fleet-owners and operators bodes well for much of the rest of the country battling the economic effects of Covid-19.

Of the states, Victoria’s economy is seen as perhaps the hardest hit by strong social measures to counter the pandemic, putting capital equipment expenditure at risk.

Yet the Victorian Transport Association (VTA) reports that its latest Covid Insights survey shows optimism expressed by VTA  and Victorian Waste Management Association (VWMA) members in April that the transport industry would recover from the economic downturn has continued – and in many cases strengthened – in June.

"The inaugural survey conducted in late April suggested the transport, waste and recycling sectors were reasonably upbeat about the prospects of recovering from the coronavirus pandemic," the VTA says.

"To gain an updated perspective on industry sentiments, participating members were interviewed again, with responses showing the industry remained upbeat about the prospects for recovery."

Among the key findings of the latest survey:

  • 60 per cent of respondents expect international trade to increase over the next four months, an increase of 15 per cent of respondents from the last survey
  • 30 per cent of members expect their staffing levels to decrease over the next three months, a small improvement from the last survey (32 per cent)
  • Slightly more members (25 per cent) reported a decline in customers since the first survey (23 per cent)
  • 80 per cent of members surveyed said they intended to invest in new capital equipment before the end of the year, a 16 per cent improvement on the first survey (64 per cent).

VTA and VWMA CEO Peter Anderson says the transport industry should be encouraged by the general improvement in optimism expressed by respondents, particularly the willingness by operators to invest in their people and their businesses despite some of the economic headwinds caused by coronavirus.

"It is one thing to say you are optimistic about a recovery, but when operators are prepared to put their hands in their pockets and purchase new capital equipment – as respondents have overwhelmingly said they are prepared to do – it suggests that there is renewed confidence in and from our sector," Anderson continues.

"The extension of the instant asset write-off until the end of the year by the Commonwealth has no doubt been a factor in operators being prepared to invest in their businesses, and we thank the government for extending the scheme and, along with JobKeeper, giving businesses the tangible economic support they needed to invest with confidence."


Read about the VTA ‘s first Covid Insights findings, here


Anderson is also encouraged that members had generally weathered the coronavirus well, with minimal reports of lost customers.

"Some business downturn was always expected however the general sentiment members have expressed in our conversations with them is that their customers are fairly loyal, and in many cases relationships have become stronger," he says.

"I think this demonstrates the genuine appreciation between customers and suppliers that we are all in this together, and that by sharing our problems and working together, our prospects for recovery are stronger.

"This has no doubt given operators the confidence to retain their people and limit staff reductions where possible, as evidenced by the small improvement we have seen in members’ outlook on their staffing levels over the next three months since our last survey."

Along with the general improvement in optimism, the VTA is heartened by the failure of complacency to set in, with more respondents reporting they have built contingency plans for less revenue over the next four months.

"Operators know and appreciate that trading conditions can quickly change, as we are seeing now in Victoria with community transmission rates of Covid-19 on the rise," Anderson says.

"So, it is encouraging that 95 per cent of operators we interviewed have enshrined contingencies in their business models for a downturn, roughly 10 per cent more than our last survey."

The VTA and VWMA represent hundreds of Victorian and national freight, logistics and waste management companies, actively engages with their sectors.

As part of this, focused interviews are being regularly held with members to establish and update baseline information about the effects of Covid-19 in terms of customer retention, relations and revenue, human resources, future investment intentions, and trade expectations.

 

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