In the early months of this year, the equipment market faced some challenges related to pricing, particularly due to uncertainty surrounding tariffs. However, recent data from EquipmentWatch indicates a stabilization in the used equipment market, despite year-over-year decreases in resale and auction prices. Brendan Gallagher, a data analyst with EquipmentWatch, highlights that while prices have dipped from April to May, there remains a level of volatility in sales largely driven by tariff fears.
Interestingly, the anticipated disruption in the equipment market primarily affected new machine sales, with original equipment manufacturers adjusting prices to account for potential tariffs on imported machinery and components. Gallagher notes that the recent drops in prices appear to be more related to standard age depreciation rather than panic, suggesting that the market is beginning to stabilize after an initial spike in prices earlier this year.
Midyear typically brings some increase in values, which Gallagher attributes to the introduction of listings for 2025 machines. This trend reflects a shift towards used equipment sales, which often become more favorable during this period.
EquipmentWatch’s data also reflects a notable 12% decline in auction values, a significant drop that hasn’t been seen in a considerable time. Additionally, there have been steady year-over-year decreases in the usage of used machines, possibly indicating a return to normal operations as the effects of the COVID-19 pandemic wane.
However, the outlook for original equipment manufacturers (OEMs) paints a more mixed picture. John Deere reported a decline in sales and profits within its construction and forestry division for the second quarter, seeing a year-over-year decrease of 23%. The company remains committed to its markets but acknowledges the significant challenges posed by the current macroeconomic environment. Caterpillar also experienced a downturn in its first quarter earnings, with a 10% year-over-year revenue decline. Nonetheless, Tony Fassino, the group’s president for construction industries, remains optimistic, noting that larger orders from dealers are still being processed, and emphasizes the importance of flexibility in navigating current uncertainties.
In conclusion, while the used equipment market shows signs of stability, OEMs face ongoing challenges due to fluctuating market conditions and tariff implications. The adaptability and strategic investments of companies like John Deere and Caterpillar may bolster their resilience in the face of uncertainty as they navigate through 2025.