Compactors: Replace Every Four Years - Features
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Compactors: Replace Every Four Years

By Pam Gruebnau

Article Date: 04-01-2004
Copyright (C) 2004 Associated Equipment Distributors. All Rights Reserved.


Sizing the nation's fleet, a 2004 forecast, average auction prices and what's new in compactor development.

The population of ride-on rollers and compactors in contractor’s fleets has increased 20 percent since 1995, according to Construction Equipment magazine’s 2003 Universe Study. “More than 28,000 firms report they have one or more pieces of roller and/or compactor equipment,” says the study, “[which] is 33 percent of the total universe of equipment-operating firms.” The study also estimates there were 72,000 ride-on rollers and compactors in use in the United States in 2003. In addition, the study found only 55 percent of the compactors in use today were acquired new. (The Universe Study is available to AED dealer members at a special reduced rate and can be ordered from the AED website at www.aednet.org.) “Sales of new compactors constitute 30 percent to 40 percent of our sales,” says Tom Ernst, sales manager of Road Machinery & Supplies in Savage, Minn. “Rental conversions equal 60 percent to 70 percent of sales.” Jeff Steere, vice president of sales for Ellen Equipment Corp. in Aurora, Colo., says Ellen Equipment sells about 10 percent of its compactors new, while 90 percent have either been through the dealership or the rental fleet before the sale. In Equipment World magazine’s 2004 Contractor Forecast, 10 percent of respondents said they planned to buy one or more compactors in 2004. Larger firms will be buying most; 20 percent of firms doing more than $5 million annually said they’d purchase a compactor or roller, compared to 7.8 percent of firms doing less than $5 million. Analyzed by business category, 16.8 percent of contractors in “Highway & Heavy” work and 12.7 percent of firms engaged in “Both Highway & Heavy and General Building Construction” say they will purchase compactors this year. Regionally, the survey found purchase plans for roller/compactors are highest in the Northeast (13.9 percent), South Atlantic (13.5 percent) and Pacific (12.5 percent) regions. Compactor replacement cycles Equipment Data Associates (EDA) analyzed their historical UCC database of vibratory compactor sale and lease transactions and found the replacement life cycle is 4 years. By analyzing the equipment acquisition histories of hundreds of contractors, EDA is able to predict (and later verify) when a company is likely to purchase a replacement compactor. Based on that four-year life cycle, EDA predicts 1,834 vibratory compactors will be purchased in 2004 as replacements. Assuming UCC filings represent 45 percent of compactors sold and leased, total vibratory compactor replacement sales and leases in 2004 should be 4,075 units. While this only represents replacements and does not include fleet expansions or contractors buying for the first time, it is based on historical data and likely establishes the minimum vibratory compactor sales level for the year. EDA expects replacement vibratory compactor sales to be strongest in the Northeast and Southeast regions in 2004. For the complete article or for a copy of the April issue, please contact Judy Brockmann at 630-574-0650 or via email at jbrockmann@aednet.org.
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