With the worst of the pandemic-related production issues now largely resolved, the construction equipment market is returning to a more normal state of affairs, despite a rise in prices over recent years. When it comes to the used equipment market, that means prices are flat or otherwise coming down, even as the average age and usage of the machines continues to decline.

“Year-over-year values are mostly in line for [resale] but some values in auction have changed quite drastically,” says Sam Pierce, sales engineer for EquipmentWatch, which tracks the used equipment market data. “We’re seeing a 10% drop [year-over-year] in construction and lift auction markets; that’s big.” The most recent data EquipmentWatch has available covers resale and auction markets as of October 2023.

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The age and usage of machines has declined compared to the same period in 2022 as well, indicating that the squeeze on equipment availability during the pandemic era is largely over. “We know that production of new machines has picked up since 2020 and 2021, so people seeking equipment are now looking to upgrade to newer models,” says Pierce. This could explain the return to a more typical age range of equipment in used channels, opposed to a few years ago when older equipment was still commanding high prices at resale and auction.

And it may not just be that prices are leveling off. “Things are keeping pretty stable or are on a gentle decline over the last six months,” adds Pierce. “The average value of piece of construction equipment in October 2023 was roughly $66,000, while six months ago in April 2023 that was $72,000. That’s a real drop.”

Original equipment manufacturers report strong backlogs, and a drop in resale prices may just reflect a restoration of normal production pipelines. “Demand remains healthy in most of our end markets, [and] due to improving supply chain conditions, product availability and lead times have improved for many products,” said Caterpillar CEO Jim Umpleby, on the company’s third quarter earnings call Oct. 31. “Although our backlog decline is expected, it still remains elevated as a percentage of revenues compared to historic levels.” Cat’s construction equipment sales in North America were up 6% in the third quarter, driven by both residential and non-residential construction, and partially driven by government-related investments in infrastructure and construction.

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John Deere reported a strong order book in its fourth quarter earnings, with machine production in full swing. “We’re finally getting back to a steady state of execution,” said Deere CFO Joshua Jepsen, on the company’s Nov. 22 quarterly earnings call. “Factory production schedules and customer deliveries have returned to traditional seasonal patterns, which has been very good for the business. And we expect that 2024 will be much the same.”

Pierce notes that a steady slide in prices for used equipment might annoy those looking to get the best deal as they clear out their fleets and refresh their inventory, but it also means there are probably some deals out there for those looking to source construction and lift equipment as well.

“In the lift [market] in particular, buyers should be picking stuff up at auction while they can, since it seems some people are taking whatever price they can get.”