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 dropped 8.4% (annualized) in Q1 2019 but is up 10% from one year ago. The Agriculture Momentum Index increased from 91.6 (revised) in April to 93.3 in May. The Agricultural Price Index for All Crops rose 2.1% in March, while Soybean Futures declined 4.9% in April. Overall, despite recent increases, the Index points to slower growth in agricultural machinery investment over the next three to six months.

Construction Machinery

Investment in Construction Machinery increased at a 7.3% annualized rate in Q1 2019 and is up 4.6% year-over-year. The Construction Momentum Index rose from 89.2 (revised) in April to 90.8 in May. In March, New Houses For Sale Under Construction decreased 6%, (its sharpest decline in 7.5 years), but New Privately-Owned Houses increased 12%. Overall, the Index continues to suggest weak growth in construction machinery investment over the next three to six months.

Materials Handling Equipment

Investment in Materials Handling Equipment increased at a 2.4% annualized rate in Q1 2019 and is up 4.8% year-over-year. The Materials Handling Momentum Index dropped from 91.2 (revised) in April to 85.5 in May, its lowest level since October 2016. Industrial Production declined 0.1% in March, while Unfilled Orders for Materials Handling Equipment dropped 1.4%. Overall, the Index points to further weakening and potentially negative growth in materials handling equipment investment over the next two quarters.

Other Industrial Equipment

Investment in All Other Industrial Equipment edged up at a 0.6% annualized rate in Q1 2019 and is up 3.4% from a year ago. The Other Industrial Equipment Momentum Index decreased from 88.1 (revised) in April to 85.3 in May, its lowest level in nearly three years. Capacity Utilization for Electrical Equipment Manufacturing declined 0.2 point to 74.5 in March, while the ISM Manufacturing PMI fell 2.5 points to 52.8 in April. Overall, the Index continues to suggest weak and potentially stalled growth in other industrial equipment investment over the next three to six months

Medical Equipment

Investment in All Other Industrial Equipment edged up at a 0.6% annualized rate in Q1 2019 and is up 3.4% from a year ago. The Other Industrial Equipment Momentum Index decreased from 88.1 (revised) in April to 85.3 in May, its lowest level in nearly three years. Capacity Utilization for Electrical Equipment Manufacturing declined 0.2 point to 74.5 in March, while the ISM Manufacturing PMI fell 2.5 points to 52.8 in April. Overall, the Index continues to suggest weak and potentially stalled growth in other industrial equipment investment over the next three to six months

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery dropped at a 16% annualized rate in Q1 2019 and is down 9.2% year-over-year. The Mining & Oilfield Machinery Momentum Index declined from 103.3 (revised) in April to 101.7 in May. Industrial Production for Natural Gas Distribution increased 3.8% in March, but the Bloomberg Natural Gas Sub-Index dropped 5.2% in April. Overall, the Index continues to suggest improving mining & oilfield machinery investment growth over the next three to six months.

Aircraft

Investment in Aircraft declined 47% (annualized) in Q1 2019 and is down 11% on a year-over-year basis. The Aircraft Momentum Index held steady at 92.6 from April (revised) to May. Shipments of Non-Defense Aircraft & Parts decreased 0.5% in December, while the S&P 500 Volatility Index dropped 4.3% in April. Overall, the Index points to weak growth in aircraft investment over the next two quarters.

Ships & Boats

Investment in Ships & Boats increased at an annualized rate of 22% in Q1 2019 and rose 3.7% year-over-year. The Ships & Boats Momentum Index increased from 103.5 (revised) in April to 106.1 in May. In March, Inventories of Ships and Boats rose 7.8%, while Houston Shipping Container Traffic surged 41%, its fastest growth in eight years. Overall, despite this month’s increase, the Index continues to suggest weaker growth in ships and boats investment over the next three to six months.

Railroad Equipment

Investment in Railroad Equipment increased at a 23% annualized rate in Q1 2019 but is down 4.9% year-over-year. The Railroad Equipment Momentum Index ticked down from 82.7 (revised) in April to 82.0 in May. Industrial Production for Railroad Rolling Stock decreased 1.3% in March, and Rail Transportation Employees fell 0.3% in April. Overall, the Index points to continued weakness in railroad equipment investment growth over the next three to six months.

Trucks

Investment in Trucks rose at a 23% annualized rate in Q1 2019 and is up 13% from year-ago levels. The Trucks Momentum Index decreased from 98.4 (revised) in April to 97.6 in May. In March, Coal Production fell 4.5%, while Industrial Production for Motor Vehicles & Parts decreased 2.5%, its sixth decline in the past year. Overall, the Index continues to point to softening growth in trucks investment over the next three to six months.

Computers

Investment in Computers increased at an annualized rate of 3.9% in Q1 2019 and is essentially unchanged year-over-year. The Computers Momentum Index decreased from 102.5 (revised) in April to 100.0 in May, its lowest level since September 2016. Computer Exports declined 2.9% in February, and New Orders for Electromedical Products decreased 2.5% in March, its steepest drop since April 2015. Overall, the Index points to weak and potentially negative growth in computers investment over the next two quarters.

Software

Investment in Software increased at a 13% annualized rate in Q1 2019 and is up 11% year-over-year. The Software Momentum Index rose from 92.6 (revised) in April to 94.2 in May. Microsoft's Market Cap rose 11% in April, but Shipments of Computers & Related Products declined 5.2% in April. Overall, despite improving this month, the Index points to weaker growth in software investment over the next two quarters.