According to the NasTrac Quarterly Index, repossessions increased significantly in most top equipment sectors for the first quarter of 2005 compared with the same period last year.
Repossessions of construction equipment increased just 13 percent, much lower than trucks (up 45 percent), medical devices (up 258 percent) and personal computers (up 79 percent). The machine tool sector was the only bright spot, showing a 44 percent decrease in repossessions. Nassau Asset Management developed the index, which tracks the top five repossessed capital assets.
“It’s possible were just coming into the season where a lot of folks with construction contracts are getting to work,” said Edward Castagna, senior executive vice president of Nassau Asset Management. “It would seem that less construction businesses are having financial trouble, but we’ll have to see what happens in the fall and keep a close eye on the winter to see if there is any trend developing.”
According to Nassau’s 2004 year-end report, the annual volume of construction repossessions in 2004 declined 6 percent compared to 2003, but the value of such repossessed equipment rose in the fourth quarter of 2004 thanks to top-dollar pieces like cranes being hauled onto the auction block.
“These numbers are encouraging for people who lend money against construction equipment as collateral,” Castagna said. “Those are always good salable assets. We find it hard to hang onto to good used construction equipment when it is in our inventory.”