Used construction inventory continued to surge in May, rising for the fifth consecutive month with track skid steers and wheel loaders seeing the highest jumps.
The rise is expected to continue throughout the year, prompting further declines in equipment prices, Sandhills Global Equipment Lease and Finance Manager Jim Ryan told Equipment Finance News.
“We finally have hit that tipping point to where we’re above inventory levels pre-COVID, and we’re climbing in certain aspects of the construction,” he said. “Between now and the end of the year, you’ll continue to see prices fall.”
The rising inventory continues to push asking and auction values down, according to categories of construction surveyed by Sandhills in May.
Medium-duty equipment
- Inventory rose 52.6% year over year in May, up 2.8% month over month from April.
- Skid steer inventory climbed 73.9% YoY in May. Both track skid steers and mini excavator inventory are at or above pre-pandemic levels.
- Auction values dropped 10.8% YoY and asking values dropped 6.5% YoY.
Heavy-duty equipment
- Used inventory rose 18.9% YoY in May.
- Auction values dropped 7.9% YoY, and asking values declined 3.7% YoY.
- Used wheel loader inventory increased the most in the heavy-duty equipment segment, rising 29.1% YoY.
Used lifts
- Inventory levels decreased 2% MoM in May but were 4.3% higher YoY.
- Asking values increased slightly MoM in May but were down 6.9% YoY.
- Auction values declined 13.9% YoY.
Steady decline
While auction and asking values are expected to continue to decline throughout 2024, the drops are expected to be more gradual than those expected for transport equipment inventory, Ryan said.
“I don’t know if we’ll see anything drastic, double digits, like the transportation sector,” he said.
Construction equipment is in demand year-round, giving it more versatility, Ryan said. The equipment is also in demand in the agriculture sector.
“There’s just a lot of capabilities with construction, a lot of use for it,” he said.
