Euro Auctions: light equipment dominates ME sales
The pick-up in small project demand is powering sales of used lighter machines in the Middle East, according to Euro Auctions’ Q1 report. Jonnie Keys, general manager of Euro Auctions, has reviewed the world market of new and used construction equipment and machinery and says that the auction house is seeing a trend of […]
Keys said with little new infrastructure projects to tender for until 2013, activity has been slow.
The pick-up in small project demand is powering sales of used lighter machines in the Middle East, according to Euro Auctions’ Q1 report.
Jonnie Keys, general manager of Euro Auctions, has reviewed the world market of new and used construction equipment and machinery and says that the auction house is seeing a trend of heavy equipment being moved out of the region to service the Australian market.
“At the end of 2011 analysts predicted that activity in the UAE would flatten during 2012 and contractors would experience a tough 12 months,” writes Keys. “With cost of labour, material and plant remaining constant in 2012 and with little new infrastructure projects to tender for until 2013, activity has been slow.”
Key estimated the value of cancelled construction projects in the MENA region rose by 8% in Q1 of 2012.
“The result is approximately $719bn of construction works put on the backburner or cancelled altogether, with over 50% of these projects being in the UAE,” said Keys. “Heavy equipment destined for infrastructure and cancelled canal projects (777s, 789s and 797s) is now moving out of the Middle East to where it’s needed most – Australia. Where last year the trend was to ‘hang on’ to machinery until the price changed, that time has now come.”
With smaller projects still moving forward, there is a need for lighter machines such as graders, dozers, backhoes and wheeled loaders.
He added: “CAT is still number one and demand has shifted to older models up to the six years old with low hours.”
Looking at global trends, Keys commented that Manufacturers are now producing again.
“In the downturn, many geared down quickly and with demand now increasing, the winners are those that are able to gear up production efficiently, as the Year End figures from Caterpillar reflect,” he said. “With the cost of new equipment up by around 20% on prices in June 2009, the used market is still strong. In mid to late 2011, regardless of make, model and year, prices strengthened for late-used and nearly-new equipment, with the strongest rallying in the 12 to 24 month class.
“In 2012, the current trend, which is predicted to continue, is that interest in older machines and equipment in the 24 to 48 month class are the next focus on the ‘wish list’ as market stocks deplete. But what has caused this market shift? Again, showing no sign of fear, Caterpillar will launch 64 new machines in 2012 and will spend $4billion on capital investment.”
