A market downturn and a potential rise in repossession orders for skid steers could indicate looming problems for the equipment industry.
“There’s so many things you can do with a skid steer, including the concrete business, landscaping. It’s endless what you can do with one,” Richard Whittaker, owner of automotive and equipment repossession agency West Coast Recovery Services, told Equipment Finance News. “When you start to get [repossession] orders for those things, something’s getting sketchy.”
More employees are becoming independent owner-operators, increasing the number of companies competing for the same business and tightening the overall market as repossession numbers increase, Whittaker said.
“Skid steer repossessions started picking up over a year ago, and now the bigger ticket items are flowing in,” he said. “It seems like [skid steers] are the first ones that teeter when things get tough. You would think it would be the half-a-million-dollar pieces of equipment such as excavation equipment, but it starts with skid steers, and then it grows from there.”
Skid steer market softens
The skid steer market has been softening, according to Sandhills Global market data.
Used skid steer sale listings increased 2.7% sequentially in November, landing at $577.7 million, according to Sandhills. Bobcat, one of the three largest skid steer manufacturers alongside Caterpillar and John Deere, used listings increased to $149.1 million, up 3.7% month over month.
Used skid steers listed at auction ($M):
Total Skid Steer Market Listings
Inventory for used skid steers clocked in at 12,441 units, and there were 2,650 units sold, down 4.5% MoM and 5.3% MoM, respectively, according to Sandhills. The decline in inventory and units sold comes as the post-pandemic recovery combines with a dip in demand, Sandhills Global Equipment Lease and Finance Manager Jim Ryan told EFN.
“We’re starting to see things recover a little bit post-pandemic, as far as inventory levels go,” Ryan said. “It’s a different dynamic with [the medium-duty construction] side, but you’re seeing a lot of that demand not quite be there.”
East Coast concerns
The equipment industry also should be watching the real estate market. The decline in the real estate market during the Great Recession heralded a rise in equipment repos, West Coast Recovery Services’ Whittaker said.
The real estate decline started on the East Coast in Florida before making its way to California and spreading across the country he noted. “A lot of the equipment repossessions also started on the East Coast.”
Larger pieces of equipment are seeing an increase in repossessions along the East Coast, including a large equipment repossession in Georgia, Whittaker shared, along with a video of the repossession.
Watch: Equipment repossession in Georgia
(Courtesy/Rich Whittaker at West Coast Recovery Services)