Ritchie Bros. sees industrial auction bidding as promising economic indicator
Map of Ritchie Bros. Auctioneers
10500 Clark Petersen Blvd., Las Vegas
The bidders stared, ready to strike when their chosen items appeared on the block. The auctioneer shouted calls, a garbled string of words and numbers. Items streamed across the stage, waiting to find new homes.
These weren’t the paintings and vases typically seen at auction. These were pickup trucks, payloaders, massive tangles of chain and rock crushers.
Ritchie Bros. Auctioneers, the world’s largest industrial auctioneer, brought 1,200 pieces of heavy construction equipment to auction Friday. More than 1,400 people from around the world gathered to bid in Apex, an industrial section of Las Vegas about 25 miles north of downtown. Another 700, some from as far away as Australia and Dubai, bid online.
Back in 2009, Ritchie Bros. told the story of a busted economy. Out-of-state buyers lined up at the Las Vegas auction house to catch a deal on equipment local construction workers couldn’t afford to keep.
Today, it tells the story of recovery. The economy is slowly picking up, and many in construction are back to work. So many, in fact, the demand for equipment is beginning to outpace the supply.
“When the world slowed down, manufacturers backed off, and we’re seeing the effect of that,” said Joe Byers, Ritchie Bros. regional sales manager. “It’s just like the housing market: There was excess product, so the market contracted. Now that things are picking up again, there’s not enough supply to meet demand.”
Workers might have to wait weeks or months for a new backhoe, whereas they can drive a slightly used one off the auction lot the day they buy it.
They still might pay a premium, though. Byers said auction prices have been rising. Attendance at the quarterly auctions is strong, and the live bidding creates competition. Friday, a 65,000-pound forklift that Ritchie Bros. employees thought would bring in about $85,000 sold for $170,000. A street sweeper estimated to fetch $25,000 netted $150,000.
Prices had fallen the past several years as construction jobs dried up and those lucky enough to find work made do with older equipment. Even better, much of the equipment bought from Ritchie Bros. is staying local.
“There was a period where a lot of our guys in this town were selling and not buying because there was no work,” Byers said. “But I’ve seen our local guys buying more.”
When the bust was at its worst, 80 percent of the equipment bought at Ritchie Bros. left town. Today, only 60 percent heads out.
Business has been so good at the auction house that company officials invested $5 million to build new facilities there. Auctions are now staged in a 33,000-square-foot, air-conditioned building. Repairs are made in a state-of-the-art refurbishing center. Auctions used to be in a tent, and administrators worked in two trailers. Bidders had to walk a massive dirt lot in the wind and heat to examine items. Now, the items come to them on an auction ramp.
“It gives our customers a lot better facilities,” Byers said. “And happy customers buy more.”