It has been a rough few years for construction equipment sourcing, as pandemic-related supply chain constraints and inflation drove up prices during busy construction seasons, but there are some signs that prices for used equipment are beginning to even out.
The latest numbers from industry analyst firm EquipmentWatch show an emerging plateau in prices in both the used and auction equipment channels, bringing some degree of relief to a market that was struggling to meet demand earlier this year.
“Equipment values for the last three months have come down a bit,” says Sam Pierce, sales engineer at EquipmentWatch. Its latest Market Report showed a 0.7% decline in resale prices and a 2.3% drop in auction prices for used construction equipment in October. Prices have slowly declined since July, accompanied by growth in reselling activity. “The activity levels are kind of interesting,” says Pierce. “They’re up 10% over [the same time] last year, and over the last month by 20%. That’s notable since the auction numbers are down over last month.” He says this goes hand-in-hand with the price plateau, another sign of stability returning to a constrained market. “People are able to sell more freely, the market is maybe a little hotter—they’re not forced to go to auction instead,” says Pierce.
For an industry that saw 2021 and 2022 construction seasons held back by shortages of available equipment as projects restarted after the 2020 pandemic lull, some stability in prices is overdue, says Pierce. “We’re really happy to see that on our end, prices not spiraling out of control and starting to normalize.”
In terms of the equipment mix in the used channels, EquipmentWatch is showing newer model years making up a larger percentage of recent resold equipment, with 2018 and 2019 the most popular. This can be taken as a sign that newer equipment is cycling through fleets again.
Beyond construction equipment, EquipmentWatch data also shows either a steady decline or a leveling out of prices in the lift-access and agricultural equipment sectors. Pierce says this could be a sign that supply chain issues affecting manufacturers are being resolved across the board.
In the auction market, major auction houses report many of the same trends. In its December market trends report, Ritchie Bros. noted that aside from a 2% rise in auction prices for large earthmoving equipment, every other major machine category showed declines in price. “With new equipment production on the rise, demand for used equipment has declined over the last two-and-half quarters,” Doug Olive, firm senior vice president of pricing, said in the report. “We experienced record price inflation through the pandemic and are now seeing that meteoric rise come back down to earth.”