Talking to Iron Capital’s National Asset Manager Nick O’Doherty, Iron Capital is taking a look at how the Australian heavy machinery market stacks up at the halfway point of 2023.
In Australia there are massive rail, road and infrastructure projects planned and underway across the country. All this available work is a very good thing, but it comes with another issue that is being seen across similar markets too – a lack of skilled labour.
While not everyone is experiencing ‘crisis’ level shortages, some businesses are finding it incredibly hard to put operators in seats.
Iron Capital’s National Asset Manager, Nick O’Doherty said when it comes to machinery demand some contractors have had to make the choice to downsize their fleet, having their hand forced by operator shortages.
Despite this, demand for many machines is still high, “we’re seeing very high interest in mobile crushing and screening equipment still with most working quarries at full capacity, the Australian market is seeing a spike in demand for units that can prepare produce rock products on site,” Mr O’Doherty said.
“We are seeing a rise in activity on crushing and screening equipment at Iron Capital, they really are in hot demand. Most of the available rock and quarry machinery is engaged in work and there’s a scarcity that’s come from this demand.”
As he explains, within the industry there has been a shift in the way people order their machines as well. “It used to be that a contractor would decide their machine is old and order a new one which would be delivered in around a month,” he said.
“These days businesses are more likely to plan for a new machine six to nine months ahead, originally triggered by the extended covid lead times. This sort of prior planning for equipment was rare before the pandemic.”
Mr O’Doherty said another shadow left from the pandemic is increased shipping costs for heavy equipment imports.
“There is a shortage of quality low houred equipment from offshore and this is driven by a dramatic increase in shipping costs and availability of low houred equipment. This contributes to the higher prices here in Australia on some key machines,” he said.
“Australia is fortunate to have so much work on, but it is tough when there’s not enough hands to get a job done. Getting the next wave of skilled labour and operators trained, and in the industry, will be as important as winning new work and having the right assets.”
Looking forward, Mr O’Doherty said some of the heat will come off the yellow iron market over the coming years, but it’s unlikely this will be a major shift, more of a continued easing as machinery supply increasingly meets demand.
“There are always challenges when it comes to this industry, but through well managed risk and key asset acquisitions, there’s still plenty of room to grow,” he said.
