PM special report: 2017 Business Outlook
2017 could go down in history as the most pivotal year of the decade, with truck sales stabilising in line with the political climate in Canberra and innovative technology causing healthy competition in the OEM arena. But there is one critical unknown.
It’s safe to say that US President Donald Trump’s divisive first month in office has absorbed much of the media attention that would have typically gone toward forecasting the domestic economy’s growth potential for 2017 – so much so that a crucial bit of news almost got overlooked. According to the Truck Industry Council (TIC), sales across all weight categories managed to retain the momentum built throughout Q4’16 and delivered the best start to a year since 2013.
With the announcement of January sales traditionally a sobering experience due to the slow holiday season, TIC’s positive assessment could mark the long-awaited turning point for Australia’s anaemic transport equipment industry. To truly break the dry spell, however, political stability will be needed both locally and on the international stage, says Prime Mover market expert, Peter Shields.
“We’ve recently seen a lot of change on a leadership level in a very short amount of time. Tony Abbott being ousted by Malcolm Turnbull as Liberal chief in September 2015 marked the fifth prime ministerial change since 2007,” he explains. “With [ex-NSW Premier] Mike Baird’s departure last month, NSW alone has had seven leaders since 2005 – that’s a lot by any standard. If 2017 goes without any additional surprise send-off, it may well set the scene for a more profound change of course.”
According to Peter, stability on the domestic political scene will ultimately help investor confidence return, but only if the radical policy changes by the new US administration don’t demoralise local businesses. “What we’ve seen is a certain thin-skinnedness on the political stage since President Trump assumed office in January,” Peter says. “Turnbull’s ratings drop in early February is a direct result of Trump’s new style of diplomacy, for example, so managing that relationship will be crucial to business success in 2017. Trump really is the big unknown in the equation, not just for Australia.”
Despite the political uncertainty, 2017 is prone to see more competition in the heavy-duty segment, Peter adds, which could ultimately benefit the market as a whole and help the positive sales trend continue.
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