Auction values for construction equipment declined slightly in May as more inventory entered the market following pandemic-induced supply shortages.
Asking and auction values for used heavy-duty construction equipment declined year over year in May, with asking values — similar to listing price — dropping 4% YoY and auction values declining 5.9% YoY, according to Sandhills Global market reports.
Inventory for heavy-duty equipment, which includes crawler excavators, dozers and wheel loaders, rose 2.8% YoY in May, according to Sandhills. Inventory for heavy-duty construction equipment is trending upward.
Asking and auction values for used medium-duty construction equipment also decreased YoY in May, with asking values decreasing 1.7% and auction values falling 6.1%, according to Sandhills.
Inventory for medium-duty equipment, which includes loader backhoes, mini-excavators and skid steers, rose 38.9% YoY in May. Inventory for medium-duty construction continues to trend upward at an increasing rate.
Sale listings for dozers totaled $534.8 million and wheel loaders totaled $398.3 million, according to data provided by Sandhills to Equipment Finance News. Listings for all excavators, which include heavy-duty crawler excavators and medium-duty mini excavators, totaled $1.2 billion.
Sale listings for loader backhoes were $101.3 million, and skid steer sale listings totaled $398.7 million — $300 million in track skid steers and $98.7 million in wheel skid steers.
Current construction market
Despite macroeconomic conditions, the construction industry is holding steady as inventories increase, Jim Ryan, equipment lease and finance manager at Sandhills Global, told EFN.
“There was a slight incline on inventory levels for construction for May, but values are holding fairly steady on the construction side,” Ryan said.
Still, increased inventory is likely to lead to further decreases in value, Ryan said.
“You’re slowly going to see ag and construction [inventory] start increasing,” he said. “You’ll probably start seeing pockets of decreased value due to that inventory rise as well.”
As OEMs like Terex continue to clear backlogs, the supply of construction equipment will continue to catch up with demand, Ryan said.
“It’s the old supply-and-demand curve,” he said. “If their inventory is there, the values are going to be down, so you’re going to continue to see that curve, probably, for the rest of 2023.”