In good and bad times, there is an economic barometer in an auctioneer’s chant. When construction equipment is offered at auction to the highest bidder regardless of price, the market’s wants, needs and dislikes are starkly revealed, as well as hints of what the future holds. Recent major auctions show there are signs of life in the U.S. economy, and many of these pulses are being felt in the heart of America. From local road repairs to hospital upgrades, some industry demand is still pumping for the workers, equipment and tools necessary to improve the lives of everyday people. Though the level of work is not what it used to be, construction machines are still wanted and needed, and that bodes well for the future of the construction industry.
This year’s giant Ritchie Bros. equipment auction, held near Orlando in late February, was a reminder that the financial woes caused by greedy Wall Street executives should not be the sole indicator of economic prosperity on Main Street. Construction businesses of all types have taken a beating, as indicated by the surge in heavy-equipment consignments at the auction. Much of the equipment sold was exported overseas, and prices were down across the board from the same time last year. It is a buyer’s market, but that does not mean much if you do not have a hole to dig, road to pave or structure to build. Many firms still do.
Sale prices for categories of equipment went up or down depending on the type of work they produce. For example, a large number of articulated dump trucks used to shape land tracts for housing filled a good portion of the Ritchie auction yard. Excavators, aerial lifts and cranes that just a year ago were in short supply now are going to auction because suppliers cannot sell them quickly at retail. But other machines, such as the multipurpose backhoe loaders that are the backbone of the industry, were in high demand, reflected in their relatively strong pricing.
The increase in auction equipment prices since they hit lows in December is a sign the industry has bottomed. There are hints of a recovery, but one has to listen very carefully to the auctioneer’s chant.