With half the country sweltering under a heat wave, it’s only apropos to look forward to a cool fall. But will fall be cool for the heavy equipment market? What has the first six months of 2023 taught us about what might be coming for used equipment values this fall?

In EquipmentWatch’s latest Market Report, construction equipment values have stalled on both the resale and auction channels. While at first it appeared to be a summer slowdown, there are indications that the construction pause might extend longer than initially anticipated. The latest Associated Builders and Contractors Construction Backlog Indicator remained unchanged for two months running.¹ While housing starts took a jump up in May², contractor confidence dipped in June³. What does that mean for used heavy equipment values?

A watchful cautious optimism that dominated early this year has turned into a full-on waiting game. Much needed contracts have yet to appear from promised federal and state programs and it is borne out in the numbers. “I’m keeping my fingers crossed that we will see some of this federal money turn into actual contracts,” reported Chief Economist at General Contractors of America, Ken Simonson in the latest edition of The Dirt podcast from EquipmentWorld. ⁴

This is due, in part, to the long-term nature of key infrastructure programs such as the nine large scale projects chosen for the Mega Program (the National Infrastructure Project Assistance program) as well as the hundreds of smaller state and local government projects that have yet to be selected for these federal grants.” According to many analysts, 2023 should bring sizable increases in investments and the development of long term projects that state administrations had been considering for some time.”⁵ And yet many contractors are still playing the waiting game.

Year over year gains remain high, and values for lift/access heavy equipment are having a moment. But the real winners in the 2023 heavy equipment market are on the rental side. There are signs that 2023 will be an even better year than projected for the equipment rental market. In fact, in a report just issued from the American Rental Association, the percentage growth for 2023 has been adjusted higher than was initially predicted, “earlier in 2023, the year-over-year growth was expected to be just 4.7 percent in 2023,” stated Alexis Sheprak for Rental Management. “The most current projections, however, indicate 7.6 percent growth in 2023 totaling $60.4 billion in construction and general tool rental revenue.”⁶

While life is rosy on the rental side, used heavy equipment managers will be cautiously watching if those much anticipated infrastructure projects turn into actual contracts. If construction spending rises, and infrastructure projects finally get underway, the fall could be warmer than anticipated for the used heavy equipment market.⁷

1. ABC’s Construction Backlog Indicator Steady in June, Contractor Confidence Down
2. United States Housing Starts
3. ABC’s Construction Backlog Indicator Steady in June, Contractor Confidence Down
4. Mid-Year Forecast: Where Does the Construction Economy Go from Here?
5. US infrastructure spending starts 2023 with a bang
6. Rental Management recognizes the equipment rental industry’s 2023 Market Movers
7. Monthly Construction Spending, May 2023

At EquipmentWatch, we analyze equipment values on a regular basis with our monthly Market Reports. More in-depth reports such as The State of the Construction Equipment Economy aim to arm you with the insights you need to make quality, informed decisions about how to manage your heavy equipment. EquipmentWatch 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 are also ready 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 EquipmentWatch call us at (888) 307-1713.