2008 Economy and the Affects on Equipment Prices

[rutwad]

I am wondering what everyone thinks this years economy will do to the price of new equipment, and how much impact do you think it will have? Will one sector of construction equipment be affected more than others?

 

[pwl]

I am in the market for just about everything for my 3ph except a box blade. I hope the prices go down. But when was the last time that happened. Used equipment may get cheaper if people can't afford to run it on $4 gas and diesel. Sad.

 

[Terra Firma Scott]

With talk of a Recession-fuel prices going ballistic-slowing/slump in housing market-elections,etc...nobody is spending at consumer levels..My 9-5 job is HURTING....Barely surving.....

I feel certain types of construction equipment prices (NEW) will be unaffected...Large types of machinery to continue building roads,highways,etc....

I feel smaller equipment that sub contractors need/use we might see a drop..Perhaps incentives via lower prices or 0% interest to move new track loaders/mini excavators,etc...

All I know is im trying to keep a cool head about the economy but remain gaurded at the same time...

Probly be alot of REPOS for those that jumped in late...which someone at the right place at the right time could get a sweet deal on a piece of USED iron...

What yall think?

 

[ultrarunner]

I've been wondering the same thing...

My company announced that there would be no raises or cost of living increases this year and hiring is frozen

My cost for materials... fuel, electrical supplies and medical equipment continues to increase with vendors blaming the weak dollar for the price increase on German made medical diagnostic equipment...

Interesting times we live in...

 

[Cat_Driver]

Around here plumbers that were getting $30.00/Hr. are begging for the $10.00/Hr. clean up jobs.
Great time if you need work done, a lot of guys will work for darn near min wage, were a few years ago you couldn't even get people to come out and bid a job because they were all too buy, and if they did come out there prices were ridiculous and they had a take it or leave it attitude.

 

[jcbGM]

Some thoughts:

1. Last year the US equipment market was down 13% over 2006. In December, most industry experts forecasted 2008 to be down 8% over 2007. Now they're saying as much as 10%. (we're talking number of units sold not $$ volume)

2. Typically, CAT and Deere don't discount much, but in these tight market conditions you'll see them cut some deals. Keep in mind that most CAT dealers have over 100% absorption (all the bills, salaries, mortgages, expenses are paid by parts, service, and rental. Machine sale dollars go straight to the bottom line).

3. Machine availability will be/is a HUGE issue on those machines that are built overseas (excavators). This is due to the weak dollar. They can ship machines to Asia and North Africa from Japan and make more money on them rather than taking the hit on the currency exchange and shipping them here to the US. If a dealer doesn't have a certain spec in stock, then you probably won't get it. Dealers are tightening up on letting go of machines to other dealers because they know it will be hard to replace the machine.

4. Most likely there will be a glut of US produced machines as manufacturer's will try to keep high production volumes (to satisfy shareholders), but with a reduced customer base (see #1)

 

[Kays Supply]

When you say plumbers @$30hr around here. Where is around here? I am in Illinois and a plumber @ $60 hr. I am one of the lowest priced in my area. I sure want to stay around here not there.

 

[LoneCowboy]

I wouldn't buy a repo machine. If you couldn't afford to pay the payments, would you do maintenance on it? of course not. And you would beat it to death right before they came to get it. Although I do agree there are going to be a lot of them.

I think prices for new tractors are going up. Even if they cant' do a deal, the input prices are still going up crazy fast. Think 1970's stagflation. Even if the price itself doesn't go up, the finance prices will. (that's what credit crunch's do, nobody wants to lend)

prices for used will probably decline because they are harder to finance and there will be lots of smaller equipment on the market. Cash will be king

 

[daveinnh]

Iv'e read in a recent issue of ENR magazine (fna Engineering News Record) that the US heavy equipment machine market - new and used - is doing well because foreign contractors are getting good buys due to the low US$.

 

[rvaitor]

I wouldn't buy a repo machine. If you couldn't afford to pay the payments, would you do maintenance on it? of course not. And you would beat it to death right before they came to get it. Although I do agree there are going to be a lot of them.

I think prices for new tractors are going up. Even if they cant' do a deal, the input prices are still going up crazy fast. Think 1970's stagflation. Even if the price itself doesn't go up, the finance prices will. (that's what credit crunch's do, nobody wants to lend)

prices for used will probably decline because they are harder to finance and there will be lots of smaller equipment on the market. Cash will be king

I've bought some repo's over the years. Watch what you are buying and you'll be okay. Also, bought some government surplus - some decent some not so decent.

The key is to watch what you are buying and be careful.