A strong construction season and positive signs that manufacturers are solving supply chain issues have energized an equipment market that had been marked by rising prices and a scramble to source used equipment. The latest figures from industry analyst EquipmentWatch hint at some hopeful trends from the last few months. Used equipment prices at resale and auction are continuing to plateau, with the irregular spikes seen during pandemic disruptions of recent years possibly now a thing of the past.

equipment watch

A Slight Return to Normalcy

Hints at the end of last year of greater price stability have begun to be borne out by the data, according to EquipmentWatch. In particular, the numbers seem to show a slight decline in resale activity, but a jump in auction volume. “It looks like people are trying to get rid of equipment more in February compared to January,” says Sam Pierce, sales engineer with EquipmentWatch. “But they’re coming off a slow season in the winter, so we expect it to pick up in the spring.” These are seasonally expected trends, and it’s notable that resale activity in the first months of the year were considerably lower than at the beginning of 2021, when pandemic-related supply chain disruptions were in full force and fleet managers were trying to source equipment from wherever they could find it.

Related link: ENR 2023 1Q Cost Report PDF
Subscription Required

And a return to the more recognizable seasonal swings in equipment prices and activity is something that would be welcome after a jittery few years. But the end of uncertainty may come with a somewhat higher price floor as well. “Really it has been pretty stable—in December a dip [in [prices], in January a rise,” says Pierce. “But it’s still maintaining a gentle increase. We’re at 4% higher [used equipment] values from this time last year, almost 14% higher than two years ago.” Pierce adds that given the current general economic climate in the U.S., he does expect prices in resale to continue to rise gradually in the coming months. And with a rise in interest rates expected to impact financing options for equipment purchases, it’s not entirely surprising to see a spike in auction activity.

equipment watch

Intel From CONEXPO

For those trying to procure new equipment, there are other obstacles to consider. Nearly 140,000 attendees flocked to Las Vegas last month for the triennial CONEXPO-CON/AGG equipment trade show, and a strong demand for fresh iron was often met with the harsh realities of the already full backlogs of numerous original equipment manufacturers.

Anecdotally, ENR found that show attendees were eager to reserve new equipment, even if delivery couldn’t be guaranteed until well into 2024.

This mood was also detected by industry analysts at the show. In a March 20 note to investors about trends at CONEXPO, Credit Suisse lead industry analyst Jamie Cook observed that “demand continues to outpace supply” for OEMs, and “channel inventory remains below normalized levels and is expected to remain low as we exit 2023.” Cook also notes that demand for new equipment is compounded by a rental fleet that is aging and falling short of demand. She expects OEM backlogs to stay strong for some time.