The Reserve Bank increased the base rate 0.25 of a percentage point to hit 4.25%, the fifth such hike in the past seven months.
Dave Lewis, KBA general manager, sheetfed presses, told ProPrint: “In my experience, when rates go up it’s because the economy is booming and usually the printing industry is doing well out of that. This isn’t the case.”
However, Lewis added that “investment is so low that I don’t think it will have any impact”.
Fuji Xerox Australia’s Simon Lane pointed out that the printing industry was facing a more fragile recovery than the wider economy. “So this will definitely affect those companies that are highly leveraged or on variable rate loans.”
“The industry has seen a lot of businesses that are struggling, so any time that money gets more expensive makes things tougher,” added Lane.
According to Frederik Dehing, managing director of Agfa Oceania: “For companies investing in capital equipment, it’s not a good thing. There’s not a lot of cash out there in the industry so they have to get credit, and that just got harder.”
However, Dehing said that the strength of the Aussie dollar would go some way toward compensating for the pressure of a rate rise.
“If you get interest rate increases in a dry time, it’s never a good thing for companies that want to invest, but you need to look at the total picture,” he said
“A lot of equipment comes from Europe and Japan, so suppliers here can be a lot more aggressive than they were last year,” added Dehing.
“As the industry is buying equipment, consumables and paper from overseas, the strength of the Aussie dollar should compensate for any interest rate rise.”
Manroland Australasia managing director Steve Dunwell agreed that now was “the best time to buy” due to the strength of the dollar against the euro.
He said: “It’s offset by the strength of the dollar – they’re paying 10% less than they would, say, six months ago. I can’t see the Australian dollar staying where it is now – it’s too high.”
Dunwell didn’t think the rate hike would have a massive impact. “The printers who are going to invest in capital equipment will have a good balance sheet and good business and be getting finance from their own banks.”
He said fewer printers were currently making buying decisions, with a lot “sitting tight”.
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