Auction values for construction equipment dropped in August as the market adjusted to an increase in equipment inventory.
Auction values for used, medium-duty construction equipment declined 0.1% month over month and 7% year over year in August, according to Sandhills Global auction market data. Medium-duty construction asking values also slid, down 0.2% MoM and 1.7% YoY.
The decline is largely due to inventory returning after supply-chain disruptions, but seasonality also plays a role, Jim Ryan, equipment lease and finance manager at Sandhills Global, said during a Tuesday company presentation.
“As those new units become readily available, more of the medium-duty [equipment is] hitting the market,” he said. “The biggest drop in auction values [for medium-duty equipment] were on the wheeled skid steers and the mini excavators for the month of August.”
Auction and asking values for used, heavy-duty construction equipment dropped on both a sequential and annual basis as recent inventory spikes continued to affect the market. Auction values declined 2.2% MoM and 7.2% YoY, according to Sandhills. Asking values dipped 1.7% MoM and 4.8% YoY, with excavator values dipping the most.
The gap between auction and asking values continues to widen, but now trend in the same direction, as dealers adjust asking prices to auction expectations, Ryan said.
“Dealers are late to react to where the pricing should be on the retail side, so you’re going to see this when you see [that gap widen], when an influx of inventory hits the market,” he said. “Everyone’s trying to figure out what to do, how to adjust to the market, but focusing on that auction value side, it gives you a true sense of where the market’s going.”
Inventory spikes as much as 83% YoY
Inventory for medium-duty equipment rose 6.1% MoM and 48.2% YoY in August, with track skid-steer supply jumping the most, rising 8.5% MoM and 82.9% YoY, according to Sandhills.
The change in skid-steer inventories was the largest across any equipment category by volume following historic lows during the pandemic, Ryan said.
Inventory for heavy-duty equipment rose 2.6% MoM and 9.5% YoY in August, according to Sandhills. Inventory for heavy-duty construction equipment continued to trend upward, with excavator inventory leading the way.
