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:

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.

Agricultural Machinery

Investment in Agricultural Machinery fell 11% (annualized) in Q3 2022 and was down 2.4% from one year ago. The Agriculture Momentum Index held at 101.9 from November (revised) to December. In September Shipments of Farm Machinery & Equipment fell 8.1%, while Grocery Store Retail Trade rose 1.4% in October. Overall, the Index’s position and recent movement suggest that agriculture machinery investment growth is likely to sidewind over the coming six months.

Construction Machinery

Investment in Construction Machinery jumped 16% (annualized) in Q3 2022 and was 17% above its year-ago level. The Construction Momentum Index edged up from 94.5 in December (revised) to 95.4 in January. In November, Months Inventory of Existing Homes rose 27% and Privately Owned Homes Under Construction were flat. Overall, the Index’s position suggests that construction machinery investment growth is likely to slow over the coming two quarters.

Materials Handling Equipment

Investment in Materials Handling Equipment dropped 7.9% (annualized) in Q3 2022 and was 1.1% below year-ago levels. The Materials Handling Momentum Index dipped from 90.3 in December (revised) to 89.7 in January. In November, Durable Manufacturing Industrial Production dipped 0.6% and Inventories of Durable Goods fell 0.2%. Overall, the Index’s recent movement and position suggest that materials handling equipment investment growth is unlikely to improve over the next two quarters.

Other Industrial Equipment

Investment in All Other Industrial Equipment fell at a 13% (annualized) rate in Q3 2022 but was up 2.1% Y/Y. The Other Industrial Equipment Momentum Index increased from 85.3 in December (revised) to 86.8 in January. The Nominal Emerging Marketing Economies Exchange Rate Index fell 1.1% in December while Machinery Industrial Production dipped 0.2% in November. Overall, the Index’s position and recent movement suggest that other industrial equipment investment growth may continue to slow over the coming six months.

Medical Equipment

Investment in Medical Equipment dropped 1.4% (annualized) in Q3 2022 but was up 4.9% year-over-year. The Medical Equipment Momentum Index eased from 102.4 in December to 100.8 in January. In November, Industrial Production for Miscellaneous Medical Equipment & Supplies fell 1.2% and Capacity Utilization for Electrical Equipment Manufacturing dropped 2.5%. Overall, the Index’s position and recent movement suggest that medical equipment investment growth will likely sidewind over the coming six months.

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery rose 14% (annualized) in Q3 2022 and was 8.7% above year-ago levels. The Mining & Oilfield Machinery Momentum Index slipped from 75.8 in December to 74.2 in January. Capacity Utilization for Natural Gas Distribution rose 0.2% in November while the Brent Spot Price dropped 3.3% in December. The current position and recent movement of the Index suggest that mining & oilfield machinery investment growth may decelerate over the coming two quarters.

Aircraft

Investment in Aircraft surged at a 314% (annualized) rate in Q3 2022 and was 23% above year-ago levels. The Aircraft Momentum Index jumped from 111.9 in November (revised) to 116.1 in December. In November, the S&P 500 Volatility Index fell 21% and Southwest Airline’s Market Cap rose 9.8%. Overall, the Index’s position and recent movement suggest that aircraft investment growth may continue to pick up over the coming two quarters.

Ships & Boats

Investment in Ships & Boats jumped at an annualized rate of 31% in Q3 2022 and was 12% above its year-ago level. The Ships & Boats Momentum Index fell from 106.1 in December (revised) to 103.3 in January. Industrial Production of Ships and Boats fell 1.5% in November while the ICE U.S. Dollar Index dropped 2.3% in December. Overall, the Index’s position and recent movement suggest that ships & boats investment growth may decelerate over the coming six months.

Railroad Equipment

Investment in Railroad Equipment increased 116% (annualized) in Q3 2022 and was up 58% year-over-year. The Railroad Equipment Momentum Index eased from 97.3 in December (revised) to 95.6 in January. Rail Carloads of Petroleum Products dipped 0.4% in December while Railroad Rolling Stock Industrial Production fell 4.3% in November. Overall, the current position and recent movement of the Index suggest that railroad equipment investment may have peaked and could start decelerating in the coming six months.

Trucks

Investment in Trucks rose 43% (annualized) in Q3 2022 and was 1.7% above year-ago levels. The Trucks Momentum Index dropped from 100.0 in December (revised) to 96.7 in January. In November, Coal Production fell 5.7% while Industrial Production of Light Trucks also fell 5.7%. Overall, the position and recent movement of the Index indicate that trucks investment is unlikely to accelerate over the coming two quarters.

Computers

Investment in Computers surged 39% (annualized) in Q3 2022 and was up 11% year-over-year. The Computers Momentum Index rose from 94.2 in December (revised) to 95.9 in January. Total Revolving Debt increased 0.9% in October and the Conference Board Consumer Confidence Index increased 6.8% in December. Overall, the Index’s position and recent movement suggest that computers investment growth is unlikely to accelerate further over the coming six months.

Software

Investment in Software rose 15% (annualized) in Q3 2022 and was up 12% from a year prior. The Software Momentum Index improved from 94.2 in December (revised) to 96.6 in January. IBM’s share price fell 5.4% in December and Non-Residential Construction Spending increased 1.7% in November. Overall, the Index’s position and Recent movement suggest that software investment should remain in positive territory over the coming two quarters.