Chatting to the team at Pickles, we look at what’s affecting the market, where it’s heading and what drives it.


 
What’s going on in the Trucking and Transport Industry?
The industry is at the start of a correction period. The market for new heavy trucks such as prime movers is down and what typically follows is a slowdown in the used market in due course. However, volume was very high in April so we expect this downturn to be small.
 
What drives the market?
Key areas are the new market, current auctions and sales, political landscape and the Infrastructure and Construction Industry.
 
When the new market drops, the used market will also experience a decline. Again, when it’s on the rise, the used market follows suit. A few years ago we saw a significant uplift in the new market and are expecting to see a number of late-model prime movers come onto the used trucks market as they near end of lease.
 
Recently, a large number of liquidations such as Redstar have put pressure on assets in or coming to market. We expect this to only have an effect in the short term as due to the political landscape many of these assets will be required for upcoming construction and infrastructure jobs.
 
Another factor coming into play is the Federal Election. Typically, the market slows as it waits to see who will hold Government and the roll-on effect from this.
 
Can you explain more on how the elections will affect the market?
Buyers tend to cool their heels around elections as they wait to see who takes power and what policies, reforms and projects are given the green light. However, in saying that many major infrastructure projects have already been tipped to start such as the second airport in Sydney as well as a number of infrastructure projects in Melbourne so we don’t expect the market to hold for long.
 
Non-residential construction work is set to be on the rise over the next few years especially in NSW so projects such as these are expected to rally the market.
 
What industries are buying and selling right now?
The industry can be broken down into asset classes all of which are bought and sold differently but have some crossover. The Redstar auction was a huge success with assets mainly bought by those in the Freight Transport Industry.  Generally, when one market cools off, another market will be on the rise giving assets a second or third lease of life. For example, while assets used in the Agricultural industry may be down, subcontractors in regional areas need the same or similar equipment in regional areas for roads and other projects so we are seeing equipment hold its value.
 
What do you expect to see in the next 12 months?
In Western Australia we’ve already seen the truck and heavy haulage market pick up in the last three months which is iron ore based.
Moving forward, we expect to see increased interests in assets relating to construction post-election and when announcements are made on specific infrastructure and construction projects we expect another upturn.
 

17 May