We continued to see lower construction equipment activity on both the resale and auction channels in November, with resale activity down 26.8% and auction activity down 49.9% year-over-year. Average age continued to trend upward, increasing 18.7% on the resale channel and 31.2% on the auction channel compared to one year prior. FMV was up 5.7% year-over-year despite that jump in average age, however FLV declined 3.2% over the same period.
(Resale activity based on listings; Auction activity based on sales results.)
Our analysis of 2021 activity shows that crawler mounted hydraulic excavators, four-wheel drive articulated wheel loaders, and compact track loaders—in that order—were the top three construction equipment types for both resale and auction. This month we are walking through the metrics for these top equipment types to see how the overall trends we’ve experienced in 2021, including depressed activity and upward pressure on asset ages, have factored into the values for these asset types.
We can see from the value trend charts above that values for all three asset types increased, both overall and for the subset of assets in the five- to seven-year-old age range. On the lower end, FMV for four-wheel drive articulated wheel loaders increased just 4.6%, while on the higher end FLV for five- to seven-year-old compact tract loaders jumped 46.2%.
As shown below, we can see that activity was down for all three asset types, while average ages increased. Again, we are observing a direct cause and effect relationship since the lack of availability has directly led to the increases in equipment age we observe below.
As we go into 2022, we are likely to continue seeing these trends play out as supply chains remain tangled and new Covid variants emerge. Only once the virus and supply chains are under control would we anticipate seeing these trends reverse.
*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.