Story written for ForConstructionPros.com and first appeared Julyl 2021
Take a moment to remember where you were in March of 2020 when the pandemic took hold in the U.S. I vividly remember arriving at CONEXPO in Las Vegas, well aware of COVID-19, but not yet recognizing the magnitude of its impact. Just days later, I left CONEXPO with a very different feeling and outlook for the weeks, months and year ahead.
Although we are only halfway through the year, I think it is safe to say that 2021 in the equipment industry will be remembered as another unique year. Perhaps not as profound as the pandemic, this year is already one marked by challenges even industry veterans had never seen, myself included.
While tough times make it easy to look through the lens of pessimism, remember this: with challenge come opportunity. Here are three primary ways 2021 has tested the equipment industry and what we can do about it.
1. New Equipment Availability
There is perhaps no hotter topic right now than new equipment availability – actually, the lack thereof. The combination of supply chain disruptions, labor challenges, high steel prices, electronic component shortages, high demand and a slow rebound from 2020 are all contributing to it being extremely tough to get new machines.
Gone are the days when you could go to an equipment dealership and buy a machine off the lot. Inventory is low while wait times are at historic highs. According to this ForConstrutionPros.com article shared in June shared in June, lead times are the highest they have been in nearly 35 years.
This current equipment availability scenario certainly is a problem, but it is a great opportunity for companies to strengthen relationships with equipment dealer partners.
2. Used Equipment Availability
Not surprisingly given the market demand, the availability challenges have trickled down into the used equipment market, too.
When it comes to dealer used equipment fleets, RDO and other dealers I have spoken to are light on used machines for sale. Auctions too are seeing low numbers of machines.
All signs are pointing to it being another hot year for used equipment, a trend that is already on pace according to Ritchie Bros. Asset Solutions’ Market Trends Report for July. Looking at calendar Q2 2021, Ritchie Bros. is showing prices for large earthmoving equipment up 8 percent year over year in the U.S., with medium earthmoving equipment up 25 percent.
While this is a challenge for buyers in the market for pre-owned machines, the opportunity here really is for sellers. For those looking to move used machines, it is a seller’s market.
To ensure you get the maximum value from used machines, read my article from this spring that shares several tips and best practices when selling used equipment.
Need service for those machines? Watch to learn more about Capstone Certification and how RDO’s service technicians stay sharp and up-to-date on equipment.
3. Labor Availability
The summer of 2021 might be the only time in history the labor shortage will not be remembered as the industry’s biggest challenge. With equipment availability issues taking center stage, the labor shortage is not as top-of-mind as it has been in previous years. But it is still very real and, if you can believe it, there are even more challenges equipment companies are now facing when looking to hire and retain talent.
Several industries are now finding it extremely difficult to hire and retain talent; hospitality and service are two in particular. This is further pressing on equipment dealers and companies. We are no longer just competing against the perceptions of the equipment industry; companies are now competing against employers across multiple industries that are more aggressively than ever trying to hire from the same pool.
Our industry continues to work towards a solution to this challenge. The Association of Equipment Distributors (AED) is one of the larger organizations with an active focus on workforce development. My colleague, Marshall Anderson, has worked in the industry with RDO for 20 years, is an AED board member and passionate about this topic. I asked him for his thoughts on the biggest opportunity to attract and retain workers. Without hesitation, Marshall said, “Tell our story.”
That is a statement I agree with 100 percent. We as a united team in the equipment industry, have an opportunity to showcase the industry and appeal to job-seekers in new ways. One of the “benefits” to us that came out of the pandemic was construction being classified as an essential business. The layoffs, furloughs and other tough realities other industries faced did not hit equipment as hard. In fact, many companies found themselves busier than ever and workers secure in their jobs.
Furthermore, Marshall noted that many people do not truly realize all the opportunities that exist in the industry.
“If you want to work with your hands, we have something for you. Want to manage a team? You can do that. No interest in working in an office? No problem. Getting into the equipment industry opens so many doors and opportunities for different careers. Dealers, contractors, everyone allied to this industry need to make sure job-seekers know all that,” he said.
Want to know what it’s like to be a service technician? Hear from one of RDO’s rockstar technicians, Julia:
While hiring new people is always the first thought when we talk about the labor shortage, it is equally important to keep great team members.
Second step: Attract
Do your part to tell the story of the good pay, job security and wide variety of careers that come with this industry
3 Takeaways for 2021
There are three key things to know in 2021 and to take with as we start looking at 2022: