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An Update on the Construction MarketJune 20, 2024
Read more about the current construction equipment market from the desk of Chris Gellner.
Well, 2023 has come and gone like a blur, and it seems like overnight, we moved into Q2 of 2024, trying to figure out where the time goes. Coming into 2024, there have been a lot of questions on how the market will hold up and react to all of the stresses that have been put on it over the past years, and as expected, it's all over the board. The number of negative stressors on the market over the past 6-12 months is something we haven't seen since pre-covid days, and as always, it seems to be the auction world that tells the tale first as realities set in and levels come back to normal.

In the construction world, there has been an influx of equipment back into the marketplace over the past months, which we should continue to see for the foreseeable future. Dealer networks are starting to see their yards filling back up and new orders being fulfilled in a timely manner in most sectors. These increased inventory levels are starting to have an impact on the pricing structure of used equipment of 5-10% decrease year over year in your standard asset categories such as loaders, dozers, excavators, etc. With expectations at the end of 2023 being that the market would fall off hard, I think the values holding slightly less than steady is a testament to the optimism of available work that is out there for 2024.

As far as the transportation market is concerned, I would say reality is starting to show its teeth as prices have fallen off across the board in this sector. With companies like Yellow Freight filing bankruptcy, they will be forced to dump thousands of power units and tens of thousands of trailers into the marketplace, which, in a short time, could take us from all-time high prices to the possibility of all-time lows. Only time will tell, but all the markers are pointing in a sharp downward trend.

As the price of oil hangs in the $75-85/barrel range, the Oil & Gas market values have held very strong. Although this seems to be one of the most volatile markets out there for the foreseeable future (6 months), it looks as though it will be business as usual, and asset values should stay within 5% up or down of where they have been for the last while.

All in all, I can say with confidence that things are better than this guy would have expected going into Q2 of 2024. If you were to compare like-to-like values to assets from pre-covid to now, I would venture to guess we are still in a positive place. It's funny how fast we can forget what normal looks like when we are in the middle of a frenzy like we were from 2020-2023. One thing that is tried and true and you can count on is that the auction method of marketing will show us which way the market is trending. Good, bad, or ugly, it will be the true reflection of the market, so let's try and enjoy the ride no matter where it takes us.

Chris Geller
Director of Construction