While there have been some worries about clouds on the horizon, it’s not evident from a glance at the heavy equipment market. After a few years of supply chain issues and uncertainty about the market, prices for used equipment seem to have leveled off and even slightly declined, according to the latest data from industry analyst firm EquipmentWatch. “In the construction equipment field it looks like values are dropping year-over-year, which seems likea good thing, as there’s more affordable equipment out there,” notes Samuel Pierce, sales analyst with EquipmentWatch. “Every indicator dropped slightly in February, but it’s more or less stable. It’s less of a drop than in January.”

Pierce adds that a few months of a dip in prices does not indicate a general slide, and when setting aside normal seasonal construction trends it’s more indicative of stable pricing. There are other signs that stand out, however, such as a jump in usage in some categories. “Looking at the numbers overall, machine usage in agriculture, lift and construction categories is all up significantly over what we saw last month, which is unusual—almost a 30% increase in auction category for construction.” This could be a statistical blip, but also may indicate that there is some well-worn equipment from recent years aging out that saw heavier use due to pandemic-related supply chain constraints.

Also, equipment manufacturers are looking to fulfill that demand spurred by unloading old machines. Major manufacturers have largely resolved their supply chain problems and are reporting record sales. “We just came off the best year in our 98-year history,” said Caterpillar CEO Jim Umpleby in a fourth quarter earnings call in February. Caterpillar reported 2023 full-year sales and revenue of $67.1 billion, up 13% from 2022. While Caterpillar reported a decrease in dealer inventories, it did see higher sales year-over-year. “We expect sales to users [in 2024] to be largely similar to 2023, with no significant change in machine dealer inventory.”

John Deere also reported positive signs on its first quarter earnings call. “In construction and forestry, we see fundamentals stabilizing at levels supportive of demand across most markets,” said Joshua Rohleder, Deere manager for investor relations. Deere did report that sales volumes for construction equipment were down slightly in the first quarter, but sees it as signs of stability rather than a slowdown. “This demand backdrop is reflected in our order books. While fleet replenishment is moderating, our order books remain at healthy levels representative of normalized volumes,” said Rohleder.

There are some possible headwinds for equipment availability due to recent events. Short-term supply chain disruptions for equipment deliveries in the eastern and central U.S. could result from the closure of the Port of Baltimore following the collapse of the Francis Scott Key Bridge. The port is one of the main entry points for construction equipment into the United States, and there may be some delays as deliveries are rerouted to other ports while the remains of the bridge are cleared.

But for the foreseeable future, Pierce says his firm’s data shows that “prices are more or less stable, a decrease in a few percentage points in year-over-year trends is just normalization—we’ve not seen any larger drops in these numbers.”