The end of stimulus funding for transportation and the overall malaise of the economy are taking their toll on construction equipment sales. When you add to that the pull-back of construction spending by state governments, the short-term sales outlook for construction equipment is not so great. A bright spot in the construction industry is the rental segment. More businesses are turning to renting rather than buying, as more companies and municipalities are increasingly hesitant about committing to major capital purchases. We are seeing rental rates inch up, which may have the effect of moving some potential renters to buyers. We’ll see how this plays out over the coming months.
An interesting fact that we have observed on EquipmentTraderOnline.com is that buyers have begun to search farther away to locate the piece of equipment that they need. In fact, 60% are searching within a radius of between 100 – 250 miles from their home ZIP code. Contrast this to the fact that only 3% of all searchers are limiting their radius to 50 miles or less. What this tells us is that price and unit scarcity are forcing potential buyers to search greater distances to find the piece of equipment that they need, at a price they can afford.
Domestic commercial truck sales, particularly in the heavier classes, are showing significant growth over last year. It appears that this trend will continue throughout 2012, as replacement demand is driving these results. Light-duty is still making headway over last year, but the growth is not as pronounced as it is in heavy-duty. The ties that medium-duty sales have to the housing market are still hampering sales, and it is unlikely that we will see a big spike in medium-duty until housing gets back into high gear.
We are seeing a large increase in the number of units for sale on CommercialTruckTrader.com. Although we normally begin to see unit growth on the site in the spring, we are seeing greater volume than we have in several years. We are also noticing unit growth on our private dealer network, WholesaleIndustrialNetwork.com. From our perspective, it appears that this will be a good spring and summer for commercial truck sales.
–Charles Bowles is the Sales Development Manager for Commercial Truck Trader and Equipment Trader. You can reach him at Charles.Bowles@DominionEnterprises.com or by phone at 757-351-7289.