As of this writing, the US Senate has just passed a short-term highway funding bill that would fund infrastructure construction through December. It is likely that the House will either pass this bill or a lightly-altered version. The business community would of course prefer a long-term solution instead of a stop-gap, so the current bill won’t do much to encourage increased demand for equipment.

With this in mind, where is the construction market currently? The struggle continues, with pockets of regional activity supporting a mild recovery. Pricing for trucks by mileage range continues to outpace 2013, but the volume of trucks sold in 2014 lags last year. The number of 2010 and newer trucks reported sold is much lower than the number of 2009 and older trucks, which makes monthly tracking difficult. This volume dynamic is due primarily to the low number of 2010 and newer trucks sold new during the recession, and also the fact that a 5-year-old truck is still likely in service with its original owner. Overall, the bulk of the used construction market is represented by 6-9 year-old trucks, and this cohort has not gained or lost much value in over two years. See graphs below for detail.

Basically, the regions with healthy construction activity will continue to bolster pricing on an average basis. However, it will take a more notable recovery in the residential and commercial construction sectors before we see prices start to increase. As for infrastructure, trade groups are actively lobbying for a long-term highway bill, but individual Congressmen are still paranoid about voter reaction to any spending measure, even one this fundamental. Welcome to politics in 2014.