Year-over-year, average FMVs were up a bit for construction (up 3.3%) while average FLVs were down 13.3%. Looking at the average age we can see why we are not observing larger gains in our year-over-year FMV and FLV metrics, since the mix of equipment is older than it was a year ago. Average age on the resale channel increased 12.7% year-over-year and on the auction channel it jumped 35.5%.
Activity bumped up a bit month-over-month on the resale channel but was still down year-over-year and compared to activity levels two years prior. Activity was also down on the auction channel, with 24.2% fewer construction equipment sales than one year prior.
(Resale activity based on listings; Auction activity based on sales results.)
Overall, this month’s metrics appear to be a continuation of what we have seen over the past few reports. As there have been delays with producing and delivering new equipment, due to supply chain issues among other factors, the availability of equipment on the used market has shrunk and the mix of equipment has shifted toward older pieces.
As we have been seeing these forces for a few months, we wanted to dive deeper to see if there have been any particular equipment types that seem representative and what we can understand about overall used market dynamics by zooming in on one specific asset type. Looking at the most popular types of equipment, based on historical activity, one in particular stood out: compact track loaders.
In July 2021, compact track loaders made up 6.7% of the resale listings, making it the fourth most prevalent equipment type for resale. One year prior, compact track loaders were actually the second most prevalent equipment type, with 12.3% of resale listings.
The prevalence tells us how much of the channel the equipment type accounts for, but as we know from the overall metrics in this report, activity has been down for construction equipment. The same is true for compact track loaders. Year-over-year, resale activity for this equipment type has dropped 53.8%. The average age of compact track loaders on the resale channel has also increased 7.2%, from 4.6 years to 4.9 years, over the same time period. Average FMVs have increased 4.3%, despite that bump in age.
To dial in even further and see how average values for compact track loaders have changed over the past year, we wanted to focus in on one particular ageof equipment to filter out the noise we’ve mentioned from the average age skewing older. For compact track loaders, we’ve narrowed in on just the 4-year-old assets.
Here we can see that both the average FMV and FLV have increased over the past year for 4-year-old compact track loaders. FMV increased 6.2% year-over-year and FLV increased 32.1%.
Of course, this is just one example of a popular equipment type that has seen a significant decrease in activity. It does help illustrate how the decrease in activity paired with the increase in average age have gone hand-in-hand, and that if we focus in on one particular ageof equipment the change in values become clearer. So, despite being just one example, it does help showcase the broader trends we have been seeing and the impact they are having on the used market.
*Fair Market Value (FMV) is the value of an asset sold to a single buyer under no compulsion. Forced Liquidation Value (FLV) is the value of an asset sold at a properly advertised and conducted auction in which the seller is under compulsion to sell on an as-is, where-is basis as of a specific date.
This article is brought to you through a collaboration between EquipmentWatch and World of Concrete 360. The EquipmentWatch Market Report is a monthly resource for the construction, lift/access, and agriculture industries to help equipment managers make better-informed decisions by leveraging key equipment values, market activity, age, and usage metrics. For more information about EquipmentWatch’s methodology and data, and to learn more about what it has to offer contractors, click here.