Year-over-year construction activity in June 2021 was down on both the resale and auction channels, with resale down 25.6% and auction down 31.0%. Activity on both channels were up month-over-month, however, with resale up 1.2% and auction, a highly seasonal channel prone to volatility, up 12.7%.
Compared to the previous two years, average age and utilization were both up on the resale and auction channels. Year-over-year average age was up 12.0% on the resale channel and 16.4% on the auction channel. On the same year-over-year basis, average utilization was up 2.8% on the resale channel and 15.9% on the auction channel.
(Resale activity based on listings; Auction activity based on sales results.)
What this increase in average age looks like on the resale channel is a skewing of equipment for sale toward the older model years. In June 2020, 63.1% of the resale listings were assets that were less than 7 years old; in June 2021, that percentage dropped to 55.6%. On the other end of the spectrum, the percentage of older equipment (11 years old or more) grew from 15.5% in June 2020 to 20.8% in June 2021.
This shifting of the age of equipment for sale also helps to explain why the average FMV and FLV for construction equipment has not increased more. Average FMV was up 3.8% compared to June 2020 but was down 6.1% compared to June 2019. Average FLV was down 13.6% year-over-year and 29.0% compared to June 2019. Considering the lean toward older equipment, the 3.8% year-over-year FMV increase actually stands out a bit more.
To dig in a little further we have analyzed the values for one popular type of equipment, articulated rear dumps. Zooming in to just the 5-year-old pieces of equipment over the last year, we can see that both average FMV and FLV were up year-over-year. For a 5-year-old articulated rear dump average FMV was up 2.1% year-over-year while average FLV was up 8.4%.
*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.