For us to begin discussing construction equipment values in 2021, we must first acknowledge and take into account how the past year has affected original equipment manufacturers (OEMs) and their production capabilities. The pandemic took the world by storm and greatly affected how businesses function, including those in the construction equipment industry.

When COVID-19 hit in early 2020, many OEMs had to shut down production due to the virus and the uncertainty it brought. As the market begins to recover, more than a year later in 2021, many of these OEMs are now struggling to catch up to the reviving demand for new equipment.

This sudden surge of demand came quicker than expected which leaves OEMs racing to keep up, while still experiencing supply chain disruptions, chip shortages, and rising prices for materials like steel. The demand may have returned, but the supply has not yet bounced back. In the past year, 53% of equipment owners noticed a lack of availability of new equipment for purchase and, of those who were able to find new equipment for purchase, 56% experienced delays in the delivery of that new equipment.

Naturally, the problem cascades down to the used equipment market. As equipment owners face delays in the delivery of their new construction equipment, they tend to hold on to their used equipment for longer, which results in a lower supply in the used channels. Moreover, many equipment owners and managers who are in the process of trading their used equipment may not have the time to wait and instead turn to the used market to trade in their older equipment with a slightly used one, ultimately driving down the supply in the used market as the demands increase.

While we broadly discuss the current value of construction equipment in 2021, it is crucial to note that the same does not automatically apply for all construction equipment categories, as some may be doing better than others. Also, as the equipment mix gets older, looking at the values of 2020 vs 2021 is not an equal comparison.

In this report, we focus specifically on the top equipment types owners have in their fleets to help provide context to the values equipment owners care most about. Because we know the average age of these equipment are essential to fleet managers and equipment owners, we focus on equipment with similar age in this report in order to highlight the specific equipment categories that are most valuable and actionable to equipment owners today.

Construction Equipment Values by Category

One group of assets specifically highlighted in this report includes excavators, road maintenance equipment, compactors, crawler tractors, and wheel loaders in the 8- to 12-year age range. Looking back two years, auction values (FLV) were down 8.4% from July 2019 to July 2021, while resale values (FMV) were up 7.2% over that same period. On a year-over-year basis, FLV increased 6.5% and FMV rose 7.9%.

In our research, we have also analyzed the values of 10-year old excavators and 12-year old wheel loaders. Similarly, the age and equipment categories were taken directly from what our current customers carry in their fleets. As shown in the graph below, excavators and wheel loaders are doing better than the broader, overall grouping of construction equipment. FLV for excavators increased 7.0% compared to 2019 and was up 14.5% year-over-year. FMV was up 17.4% over the two years and 11.1% compared to 2020. Wheel loader value increases were even more robust, with FLV rising 9.0% compared to 2019 and 20.6% compared to 2020. FMV jumped 20.0% over the two years and 13.0% year-over-year.

Getting Started Now

MagikMe Equipment can help you with the data you need now to set accurate rates, value your fleet, make disposition decisions, and understand when to rent equipment. We would also be honoured to be your principal data provider for any AI-focused projects you take on in the future. For more information on the data solutions offered by MagikMe Equipment call us at (888) 307-1717 or click here to request a product demo.