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Construction Equipment Price Trends for June 2021

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Construction equipment resale values were up in May 2021, while auction prices were down.

Average FMVs for construction equipment were up in May 2021 on both a month-over-month and year-over-year basis, however they were still down 7.2% from where they stood two years prior. On the auction side, inventory currently selling is showing models sold in May 2021 had lower FLVs than seen in the previous two years.

On the resale channel, activity was again down month-over-month, year-over-year, and compared to the same month in 2019. Activity on the auction channel was up month-over-month, however auction activity can fluctuate quite a bit from month-to-month, so the declines compared to last May and May 2019 are more telling indicators.

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(Resale activity based on listings; Auction activity based on sales results.)

Average age was up across the board on both the resale and auction channels, increasing 13.7% year-over-year on the resale channel and 23.0% year-over-year on the auction channel. On the resale channel, average utilization was up compared the previous month and the previous two years. On the auction channel average utilization was up 16.7% month-over-month but was down 8.7% compared to May 2020 and down 3.2% compared to May 2019.

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On both the resale and auction channels, the decreases in activity and increases in average age compared to the past two years shows that we are continuing to see lack of new construction equipment inventory impacting the resale channel. This is also manifesting itself in the higher average FMVs we are seeing, which were up 3.2% year-over-year.

Since both average utilization and age were up on the resale channel, we wanted to dive in a little deeper to see what the trends are telling us. On the following page we can see average utilization for 3-year-old crawler mounted hydraulic excavators on the resale channel.

Looking at 2019, we can see that average utilization for the 3-year-old piece of equipment predictably notched up each month as the equipment was out on the site getting used. From December 2019 to January 2020, we see the drop off of utilization as the cycle starts over again (with a 3-year-old piece being a 2016 model year in 2019, a 2017 model year in 2020, and a 2018 model year in 2021). Nonetheless, the average in January 2020 was about 4.8% higher than the average in January 2019, so a 3-year-old piece of equipment was already starting off with higher utilization in 2020 than it did in 2019.

In 2020 we do not see the typical gradual slope upward. We see the average utilization abruptly stop in May 2020 and plateau until August. From there, average utilization bumped up again in September and then stayed pretty flat through the end of the year.

In 2021, we can see what looks like a more normal pattern so far, with gradual increases in average utilization from month-to-month. However, while the pattern is more normal, the averages are lower than in 2020—essentially back at their 2019 levels. Moreover, the average FMV has increased 1.6% year-over-year while activity has decreased 19.8% over the same timeframe.

So, we absolutely have seen decreases in activity for this type of equipment on the resale channel, as demand has increased and availability of new inventory has decreased, but we can also likely attribute some of the value increase to the machinery being less used than its corresponding model year in 2020.

Crawler Tractors

This month, we took a closer look at crawler tractor—see the table below for the specific types included:

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Both resale (FMV) and auction (FLV) prices increased in May vs. April as well as from May 2020.

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(Resale activity based on listings; Auction activity based on sales results.)

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*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.

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