Momentum Monitor

Foundation-Keybridge Equipment & Software Investment Momentum Monitor

The Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor consists of indices for 12 equipment and software investment verticals. These indices are designed to identify turning points in their respective investment cycles with a 3 to 6 month lead time for the following verticals:

Source: U.S. Equipment & Software Investment Momentum Monitor - June 2017

The U.S. Equipment and Investment Software Momentum Monitor is published every month but every third month it is included in the quarterly updates to the U.S. Economic Outlook. The Momentum Monitor is now available to download free of charge.

Vertical Markets

Business leaders require actionable forward-looking intelligence to make strategic decisions. The Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor consists of indices for 12 equipment and software verticals . These indices identify key turning points in their respective investment cycles with a 3 to 6 months lead time. Equipment and software investment data comes from the Bureau of Economic Analysis (Nonresidential Private Fixed Investment, chained dollars) and is publicly available on BEA's website on a quarterly basis. The underlying Momentum Monitor data comes from other publicly available sources (published monthly), including BEA and the Census Bureau, and is used to calculate the Momentum Monitor indices.

Agriculture Machinery
Investment in Agricultural Machinery contracted at an annual rate of 13% in Q1 2017 and is down 2.7% from a year ago. The Agriculture Momentum Index fell from 106.2 (revised) in May to 103.5 in June. In April, National Average Precipitation surged 33.5%, but Lamb & Mutton, Pork, and Poultry Production each fell by more than 11%. Overall, the Index and recent movement suggest little change in agricultural machinery investment over the next three to six months.
Construction Machinery
Investment in Construction Machinery rose at a 15% annual rate in Q1 2017 but remains down 12% year-over-year. The Construction Momentum Index dropped from 93.6 (revised) in May to 87.2 in June. Median Months for Sale rose 0.1 to 3.7 in April, while Mobile Home Shipments fell 3.2%. Overall, the Index continues to point to improved construction machinery investment in Q2 and Q3, but recent declines in the index are concerning.
Materials Handling Equipment
Investment in Materials Handling Equipment increased at an 18% annual rate in Q1 2017 and is up 8.0% year-over-year. The Materials Handling Momentum Index jumped from 80.7 (revised) in May to 86.2 to June. Machinery Inventory Prices rose 0.4%, their fourth straight monthly increase, while Materials Handling Import Prices fell 0.7%. Overall, the Index’s recent movement signals improvement in materials handling equipment investment growth over the next two quarters.
Other Industrial Equipment
Investment in All Other Industrial Equipment rose by a 2.5% annual rate in Q1 2017 and is up 3.0% from a year ago. The Other Industrial Equipment Momentum Index ticked up from 98.1 (revised) in May to 99.1 in June. Industrial Machinery Shipments rose 3.1% in April, but Average Weekly Earnings: Production & Nonsupervisory fell 0.2%. Overall, the Index suggests continued slow growth in industrial equipment investment over the next three to six months.
Medical Equipment
Investment in Medical Equipment expanded at a 5.6% annual rate in Q1 2017 and is up 4.0% year-over-year. The Medical Equipment Momentum Index slipped from 89.8 in May to 88.9 in June. CPI Medical: Physicians’ Services fell 1.2% in April, but Personal Spending on Medical Products rose 0.6%. Overall, the Index suggests slower medical equipment investment growth over the next two quarters.
Mining & Oilfield Machinery
Investment in Mining & Oilfield Machinery rebounded at a robust 181% annual rate in Q1 2017, but remains down 12% year-over-year. The Mining & Oilfield Machinery Momentum Index increased from 110.5 (revised) in May to 113.2 in June, its strongest reading since June 2010. Industrial Production for Oil & Gas Drilling surged 8% in April, the 11th straight monthly increase, while Crude Oil Distillation Capacity increased 0.6%. Overall, the Index points to a strong rebound in mining & oilfield machinery investment over the next three to six months.
Aircraft
Investment in Aircraft rallied at a 103% annual rate in Q1 2017 and is up 15% on a year-over-year basis. The Aircraft Momentum Index declined from 105.9 (revised) in May to 102.9 in June. In April, Inventories of Defense Aircraft expanded 6.5%, the largest one-month change since July 2016, while the Transportation Services Index: Freight fell 1.5% in March. Overall, the Index’s recent movement indicates that aircraft investment is likely to remain solid in the next 1-2 quarters, but may moderate after that.
Ships & Boats
Investment in Ships & Boats rose at an annual rate of 7.4% in Q1 2017 and is up 4.6% year-over-year. The Ships & Boats Momentum Index held steady at 104.9 from May (revised) to June. Shipments of Ships & Boats fell 3.1% in April, while Grain & Oilseed Milling Shipments inched up 0.1%. Overall, the Index continues to signal improved growth in ships & boats investment over the next three to six months.
Railroad Equipment
Investment in Railroad Equipment surged at a 48% annual rate in Q1 2017 but remains down 16% year-over-year. The Railroad Equipment Momentum Index slipped from 108.2 (revised) in May to 107.1 in June. Although the Passenger Transportation Services Index fell 0.6 points, Crude Oil Imports rose 2.7%. Overall, the Index signals that railroad equipment investment will continue to rebound over the next two quarters.
Trucks
Investment in Trucks rose by a 2.9% annual rate in Q1 2017 but is down 4.3% from year-ago levels. The Trucks Momentum Index inched up from 101.0 (revised) in May to 102.0 in June. The ISM Manufacturing Index ticked up 0.1 point to 54.9 in May, marking its ninth straight month above the expansionary threshold. Overall, the Index continues to suggest that trucks investment growth will accelerate over the next three to six months.
Computers
Investment in Computers expanded at an annual rate of 16% in Q1 2017 and is up 3.1% year-over-year. The Computers Momentum Index climbed from 97.3 (revised) in May to 99.1 in June. Industrial Production of Consumer Goods rose 2.1% in April, while Microsoft’s Market Cap closed 2.0% higher in May. Overall, the Index points to positive investment growth in computers over the next two quarters.
Software
Investment in Software rose by a 7.1% annual rate in Q1 2017, and is up 4.8% year-over-year. The Software Momentum Index slipped from 96.6 (revised) in May to 94.8 in June. Although the ISM Chicago Business Barometer rose 1.9% in May, the NFIB Small Business Optimism Index moderated in April. Overall, the Index’s recent movement suggests little change in software investment growth over the next three to six months.
Independent, forward-looking resources for the equipment finance industry.