Construction Slowdown Hammers Equipment Values

Patchogue, New York-based DHS Contracting - which does excavation and land clearing - owns a lot of what you might call heavy metal. Caterpillar payloaders, Kobelco excavators and Takeuchi loaders - small bulldozers - are parked on the firm's lot. And that's the problem.

As this equipment stands idle, it's actually going down in value. And rust isn't the reason.

A New York Building Congress report projects construction spending will slide 22 percent to $26.2 billion by 2010, including a nearly 30 percent drop in nonresidential construction to $7.1 billion.

Government construction spending is expected to slip 15 percent to $14.4 billion by 2010.

The construction slowdown isn't only leading to less work, but hurting the sales and decreasing the value of construction equipment, also known as yellow iron.

"The value of equipment is based on demand," said Dennis Brophy, branch manager for Hoffman Equipment Co. "If demand goes down, the value goes down."