Last month, EquipmentWatch and AEMP launched a new report that digs into the topics equipment owners and those watching the used equipment markets really care about. Filled with topical survey results, market data, and expert analysis, State of the Construction Equipment Economy covers topics including where firms are purchasing and selling equipment, the challenges they have faced over the past year, how they plan to adjust their buying habits, how renting plays into their decision-making, equipment costs and fleet composition, and how prevalent sustainability concerns are among equipment owners.
To celebrate the inaugural publication of this report, we have pulled together some highlights to share here in the Market Report.
Report Excerpt: Biggest Business Challenges for Equipment Owners
We asked what equipment owners felt were the biggest challenges they are facing today. It is not surprising, considering how many challenges equipment owners face, that most selected more than one issue they consider to be a top concern.
The biggest challenge cited was aligning equipment management goals with pre-construction and operational goals. Disposing of assets at the right time was a close second.
Report Excerpt: Challenges Specific to Equipment Purchasing
It has been no secret that since the start of the pandemic equipment manufacturers have faced challenges similar to other industries, such as auto and commercial trucking, in terms of supply chain disruptions and getting new product to their customers in a timely manner. These trends are evident in our survey, with 56% reporting they have experienced delays in delivery of their new equipment and 53% said they have noticed a lack of availability of new equipment for purchase.
As EquipmentWatch has been reporting throughout 2021, these trends for new equipment have directly impacted the used channels, with activity for the resale channel in particular seeing declines throughout the year. Forty percent of respondents have also noticed this trend firsthand, reporting they have observed a lack of availability of used equipment for purchase.
Report Excerpt: Using Data to Determine Rent vs. Buy
We asked equipment users if, over the next 12 months, they were in a situation where they needed a piece of equipment for a project that they did not already own if they would be more likely to rent or purchase the equipment. While 16% said they would be more likely to purchase and 39% said they would be more likely to rent, 45% said that it would actually depend on the difference between the equipment’s cost of ownership and the rental price.
The fact that weighing the two options using data was the most popular answer shows that many equipment users are quite savvy and understand that the dynamics of which decision is best depends on the type of equipment, the timing, and other economic factors.
For the 55% who made a definitive statement about their likelihood to buy or rent, the ratio between them may provide some insight into sentiments they hold for how their business will fare over the next year. We know that the most common reason for renting equipment is that they only need it infrequently or for a short period of time, so the fact that 39% say they would be more likely to rent needed equipment may mean they are unsure if the inflow of projects is reliable. That is twice as many as who said they would be more likely to purchase the equipment (16%), which is arguably a cohort of equipment users who feel more confident about their projects for the next year.
Explore the full results and analysis of today's construction equipment economy by downloading the full 43-page white paper here.
