Used construction inventory swells again

Used construction equipment values continued to slide in August as inventory accumulated on dealer lots.  

Rental returns and a slowdown in residential construction contributed to the inventory surge, which has been a trend since summer 2022, Sandhills Global Equipment Lease and Finance Manager Jim Ryan told Equipment Finance News.  

“I think a lot of residential building has kind of halted,” Ryan said. “So, your smaller contractors, the way for them to stay cash flow-positive is to liquidate some of the assets they’re not needing right now and create some cash flow for the business that way.” 

The used construction equipment market was dealt a blow in August as high inventory continued to depress prices in both medium- and heavy-duty sectors, according to Sandhills Global’s monthly report covering trends in the heavy-equipment industry, released Sept. 5.  

Medium-duty equipment  

• Used inventory rose 42.7% year over year and 3% month over month in August; 
• Used track skid steers drove the inventory surge, rising 53.6% YoY; and 
• Auction values fell 10.7% YoY, while asking values dropped 7.1% YoY. 

Heavy-duty equipment 

• Used inventory increased 20.9% YoY and 2.5% MoM; 
• The wheel loaders category saw the highest inventory jump, 31.7% YoY; and 
• Auction values fell 10.4% YoY and asking values were down 5.6% MoM. 

 Used lifts 

• Inventory was up 17% YoY and 7.9% MoM; and 
• Auction values and asking values dropped 15.7% and 10.4% YoY, respectively.  

Election year woes 

The upcoming U.S. presidential election has compounded challenges facing the construction-equipment business, with many would-be buyers on standby, Larry DuPaix, owner of Salt Lake City-based Atlas Machinery, told EFN. 

“Probably 20% of contractors are holding off to see who gets elected,” DuPaix said. “They want to see who our politicians are going to be coming out of November.” 

Even if the industry gets a boost following the election, dealers will still likely have excess equipment, Sandhills’ Ryan said. 

“There is so much inventory already out there,” he said. “Let’s say you get a lot of buyers that want to come to the table and purchase, there’s still a supply and demand imbalance.” 

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