There’s no time like the present.
Here are some helpful insights on navigating the current & future economic landscape.
It’s a staple of career advice: “The best time to look for a job is when you already have one.” When it comes to buying equipment, the seeds of that statement also ring true. The best time to consider buying new equipment for your business is before you absolutely need to. Don’t look for a job or buy equipment when you’re desperate. Especially these days.
If you weave together the daily headlines, you begin to get the sense of larger forces in play that affect the supply, demand, and equipment costs. Here’s a look at a few of those forces and some reasoning why you shouldn’t put off buying today what you know you’re going to need tomorrow.
THE CHIPS ARE DOWN
The New York Times recently referred to semiconductor chips as “the new toilet paper,” harkening back to the early days of the COVID pandemic when TP was in short supply. The lack of available semiconductors has made items like vehicles, computers, appliances, kitchen equipment, and cameras scarce. Prices on any item requiring semiconductor chips are going up, and there doesn’t appear to be any easy fixes to the supply issue coming soon. Any piece of equipment that uses a semiconductor will be hard to find, and you can expect the prices of those items to only increase. If you can find what you need and know you will need it soon, you should strongly consider buying it today.
THE SHIPPING NEWS
Besides semiconductors, can you guess what else is in short supply around the globe? Shipping containers. A recent white paper by The United Nations Conference on Trade explored why freight rates have surged. The report notes that the severe shortage of containers has restricted the worldwide supply of goods, including commercial equipment. And it’s not just the commercial equipment made entirely overseas. The shipping woes have hit American manufacturers hard as well, as they wait for components and raw materials to hit our shores. In a nutshell: don’t assume that piece of heavy equipment or commercial oven you’re looking for will be available tomorrow.
The skyrocketing price of lumber. The lack of shipping containers. The scarcity of semiconductors. Massive government spending on COVID recovery. The falling U.S. dollar. Depending on what tea leaves you’ve read and what financial advisor you’re listening to, all of these issues may or may not point to impending inflation. Either way, prices on many consumer goods and commercial equipment are trending toward record highs. Simply put, it doesn’t look like things are going to get cheaper in the future. That piece of equipment you’re eyeing today isn’t likely to go on sale tomorrow.
It might be hard to believe, but we’re about halfway through 2021. That means there are roughly six months remaining to take advantage of the Section 179 tax incentive that allows businesses to deduct the full purchase price of qualifying business equipment acquired this year. Given the equipment supply issues, it might take a few months to find the piece of equipment you need. If you want or need to take advantage of Section 179 this year, you should start shopping now. For more information on Section 179, CLICK HERE.
This post intends not to cast gloom and doom on the future but to provide some guidance. Yes, finding equipment to buy for your business is challenging. Yes, prices on goods are high and are likely to increase. But if you want or need to buy now, getting financing for your equipment purchases is easy and fast.