News & Insights

Infrastructure holding strong for 2021

By Richard Lewis 

I’ve said it before, and I’ll say it again; 2020 has brought about one of the most complex operating environments in living memory, and, for some, even more challenging personal circumstances.

And, I must admit, I wasn’t immune. At the on-set of COVID, I found it somewhat nerve-wracking and unsettling to understand the myriad and fluctuating regulations, foreshadow what might happen and scenario-plan, all the while trying to keep ourselves on the straight and narrow. When the very foundation of our business operations was taken away – face-to-face client contact – I wrestled with what the future might hold.

But, we adapted, as did many others, such as our mates at Ritchie Bros. Auctions. For months now, they’ve been conducting auctions online finding different ways to get products to market.

I reckon our sector, as a whole, deserves a pat of the back for its ability to truck on and its agility to perform.

And, while there’s been plenty of commentary on Government’s leadership through the pandemic, we can’t ignore the fact that some initiatives, such as payroll tax exemptions and the instant asset write off, did their bit to support the industry.

The Federal Government’s commitments in the October budget were also significant and state government budgets have promised an infrastructure-led COVID recovery, positioning the country well moving into the New Year.

As an industry, we should feel positive about the year ahead. Our foundations have provided strength and resilience and there’s plenty of green shoots. The recent ASX-listing of Maas Group is a good example – its share price grew 31 per cent within an hour of listing, as keen investors cashed in on the excitement in the infrastructure space.

There’s no doubting the potential pipeline of work and it offers a multitude of opportunities for businesses. Market buoyance has increased demand for yellow goods across Australia, but with international borders shut and shipping delayed, there remains a lack of supply for quality equipment.

As a result, machinery prices have remained fairly strong, and businesses are holding onto their used stock as they take a longer-term view on their equipment changeover programs. For those who are gearing up for the early 2021 work, it will be important to plan ahead, and not rush to secure equipment at the last minute. Of course, at Iron Capital, we’re always here to lend our hand and industry knowledge. We’re constantly transacting and chatting with suppliers, so we have a strong handle on the market, what’s out there, and the price the equipment is trading at.

I’m looking forward to sharpening our focus locally in 2021 while we also turning some attention to growth plans overseas.

As ever, we’ll enjoy, the break and hope you do too. On behalf of the team at Iron Capital, Merry Christmas and all the very best for the new year.