A top executive from Australia's largest bank has urged for better long-term preparation to deal with a possible new wave of COVID-19.
Commonwealth Bank business bank executive Mike Vacy-Lyle said enterprises across the country were bolstering stockpiles to deal with further possible disruptions associated with the pandemic.
Mr Vacy-Lyle, who is in charge of CBA's business arm, said the bank had recently seen a large uptick in the demand for credit from forms for working capital and forward orders.
He noted businesses were now buying between three to six months in advance for stock, which in part was due to supply constraints and increased costs relating to shipping.
"Businesses need certainty," Mr Vacy-Lyle said.
"A lot of businesses are replenishing warehouses and buying a well ahead, where normally they would have had more of a just-in-time model."
Australian firms over December and January were impacted by supply constraints and isolation rules while the Omicron wave took hold.
This was also exacerbated by current skills and labour shortages, which have occurred due to the collapse of migration workers to Australia due to international border closures.
Despite being "bullish" about the economic recovery, Mr Vacy-Lyle said supply constraints had been challenging and was placing pressure on balance sheets.
"There is an expectation that demand is going to increase," he said.
Mr Vacy-Lyle said labour shortages were evident in industries such as wine-making, which rely heavily on migrants and backpackers.
"Vineyards are struggling to get labour to take the grapes off the vines," he said.
"I'm no expert by any means but I do know that you have to get the grapes off by a certain time as it affects quality."
CBA's latest half-yearly results showed business lending over the first six months of financial year 2022 came in at $13.2 billion, a 12.5 per cent jump compared to the first half of the previous year.
Bank deposits from business also climbed 14.1 per cent compared to the previous corresponding period to $21 billion.
Mr Vacy-Lyle flagged a large proponent of lending had been to businesses looking to invest into domestic manufacturing.
According to the bank's results, lending for manufacturing was up 20 per cent compared to the first half of the prior year.
CBA also recorded a 22 per cent increase in lending to healthcare manufacturing and investment.
"There is a strong recognition we need to invest in productive capacities here," Mr Vacy-Lyle said.
"I think there is a strong sense of supply chain autonomy around those sectors that matter."
