Equipment sales still going strong

Materials pricing and equipment availability remain concerns among equipment dealers. Photo: P&Q Staff

When will the supply and demand of equipment normalize?

That is the million-dollar question everyone would like an answer to as the calendar turns to July. No one quite knows when the supply chain will stabilize, but equipment dealers have a sense of what is probably required to return to the business environment that existed prior to the pandemic.

“I’m not sure we’ll ever catch up until we get into a pretty good recession,” says Chris Harris, con/agg manager at Ohio Cat. “When I look at different things happening, how do you catch up? It’s like racing a mile and you’re two laps behind. I don’t care how good you are, you can’t catch up.”

Chris Baron, vice president of sales at Goodfellow Corporation, agrees wholeheartedly.

“It’s going to take an economic adjustment for things to reset,” he says. “Hopefully, it won’t be what we saw in 2008 and 2009. But as interest rates continue to climb, we’re certainly concerned about the aggregate producers and their level of investment. Fortunately, we have a number of producers looking to capex spend into 2025.”

Most dealers, including Baron, remain largely optimistic about the months and years to come. But issues related to materials pricing, equipment availability and the workforce continue to give dealers reasons to worry.

“The longer we go through this, the more caution I see,” Harris says. “It’s kind of a weird conversation right now, because guys are saying how great they’re doing. I just don’t know when it’s going to stop. [Customers] will say: ‘I’m doing great but I’m hearing so and so is starting to slow down.’”

Pricing

Although aggregate producers may be ready to upgrade equipment, dealers are challenged with providing quotes that last. Photo: P&Q Staff

One of the more aggravating areas still impacting equipment supply is materials pricing.

Dibble Equipment’s Matt Dibble, for example, says steel surcharges are still pretty common in quotes to ensure dealers protect themselves.

“That’s pretty much on all of our quotes,” Dibble says. “Not parts necessarily, but for new equipment. Everybody is pretty aware of what is happening in the market.”

A dealer’s quotes don’t necessarily last as long as they once did, either. That’s a direct result of the costs being passed on to dealers.

“We distribute portable aggregate equipment,” says Dale Bianco, CFO at US Equipment Sales & Rentals. “I’ve never seen – in any industry – prices change 5 or 6 percent every quarter. It’s understandable. The main inputs are steel, and we’ve got steel shortages. But it’s not sustainable.”

Dealers like Bianco await some relief on pricing.

“Every quarter we go: ‘That’s got to be the last one,’” he says. “‘They’ve got to come back with a 2 percent [increase] or something.’”

Pricing volatility certainly hampers a dealer’s ability to plan – or, at least, plan well.

“It’s impossible for us to predict,” Bianco says. “We’ve got customers now going: ‘That’s a lot of money. I think I’ll just rent.’ That, coupled with the fact that we don’t have a lot of confidence in whether we can get the machines we need [in] six to nine months, makes it very hard to forecast and identify what is going to be the price for our company.

“You may want to order a piece of machinery,” he adds. “But I can’t tell you what it’s going to cost in six months. It’s very difficult.”

Baron feels Bianco’s pain.

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