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 edged down 0.9% (annualized) in Q2 2021 but is up 26% from one year ago. The Agriculture Momentum Index was unchanged at 97.3 (revised) from September to October. In August, Export Prices of Food, Feed, and Beverages increased by 2.7% while Soybeans and Other Oil Seeds Exports declined by 0.5%. Overall, recent movement of the Index suggests that agriculture machinery investment growth may ease in coming months, though Y/Y growth will likely remain in positive territory.

Construction Machinery

Investment in Construction Machinery rose 17% (annualized) in Q2 2021 and is 31% above its year-ago level. The Construction Momentum Index was unchanged at 114.9 (revised) in October. Housing Permits fell 24% in August and the Commercial Property Price Index rose by 0.6% in September. Overall, the Index’s recent movement suggests construction machinery investment growth will stay elevated over the next six months.

Materials Handling Equipment

Investment in Materials Handling Equipment grew 7.4% (annualized) in Q2 2021 and is up 17% year-above year-ago levels. The Materials Handling Momentum Index was unchanged from 107.5 (revised) in September to 107.5 in October, the highest level in nearly a decade. In August, Inventories of Materials Handling Equipment rose by 1.0% and Shipments of Materials Handling Equipment declined 1.4%. Overall, the elevated position of the Index indicates that materials handling equipment investment growth should remain robust over the next two quarters.

Other Industrial Equipment

Investment in All Other Industrial Equipment expanded 50% (annualized) in Q2 2021 and rose by 22% Y/Y. The Other Industrial Equipment Momentum Index decreased from 117.5 (revised) in September to 113.5 in October. Domestic Manufacturing & Trade Sales ticked down by 0.1% in July while Manufacturing Employment rose 0.2% in September. Overall, the current position of the Index indicates that other industrial equipment investment growth should remain elevated over the next six months.

Medical Equipment

Investment in Medical Equipment rose 3.2% (annualized) in Q2 2021 and is up 20% over-year. The Medical Equipment Momentum Index held steady at 101.6 (revised) in October. In August, the Consumer Price Index for Dental Services increased by 1.3% while Medical Equipment and Supplies Industrial Production fell by 1.7%. Overall, the Index’s recent movement and level suggest that medical equipment investment growth should decelerate over the next two quarters, though growth will likely remain in positive territory.

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery rose 10% (annualized) in Q2 2021 and is 2.8% above year-ago levels. The Mining & Oilfield Machinery Momentum Index inched up from 113.4 (revised) in September to 114.2 in October, the highest level in nine years. Crude Oil Production surged by 13.0% and Mining & Logging Employment rose by 0.8% in September. The Index’s elevated position points to accelerating mining & oilfield equipment investment growth over the next six months.

Aircraft

Investment in Aircraft surged 119% (annualized) in Q2 2021 and is 169% above year-ago levels. The Aircraft Momentum Index edged down from 109.4 (revised) in September to 107.7 in October. Aerospace Exports to Canada increased by 3.0% in July while Shipments of Non-Defense Aircraft & Parts fell by 3.2% in August. Overall, the Index’s current position suggests that aircraft investment growth will remain elevated over the next two quarters, though growth may have peaked.

Ships & Boats

Investment in Ships & Boats surged at an annualized rate of 139% in Q2 2021 and is 64% above its year-ago level. The Ships & Boats Momentum Index eased from 115.1 (revised) in September to 114.2 in October. New Orders of Ships and Boats increased by 6.1% while Real Disposable Personal Income fell by 0.3% in August. Overall, the current position of the Index suggests that ships & boats investment growth should remain healthy over the next two quarters.

Railroad Equipment

Investment in Railroad Equipment fell 18% (annualized) in Q2 2021 and is down 3.1% year-over-year. The Railroad Equipment Momentum Index declined from 105.3 in September (revised) to 102.9 in October. In September, Crude Oil and Petroleum Products Exports fell by 14.4% and Rail Carloads of Metallic Ores & Metals fell by 19.2%. Overall, the current position of the Index suggests that railroad equipment investment growth should continue to improve over the next six months, though upside potential may be limited.

Trucks

Investment in Trucks grew 35% (annualized) in Q2 2021 and is up 61% from year-ago levels. The Trucks Momentum Index rose from 109.2 (revised) in September (revised) to 115.1 in October. Capacity Utilization for Furniture Manufacturing increased by 2.1% and Manufacturers’ Inventories of Light Trucks & Utility Vehicles increased by 2.9% in August. Overall, recent movement of the Index indicates that investment growth should remain robust over the coming two quarters.

Computers

Investment in Computers fell 36% (annualized) in Q2 2021 but is up 8.7% year-over-year. The Computers Momentum Index was unchanged at 118.1 (revised) in October. Sales of Computers & Computer Peripheral Equipment & Software fell by 4.8% in July while Capacity Utilization for Computer & Electronic Product Manufacturing ticked up by 0.8% in August. Overall, the Index suggests that computers investment growth should remain in positive territory over the next six months and may even accelerate.

Software

Investment in Software increased 14% (annualized) in Q2 2021 and is up 15% from a year prior. The Software Momentum Index was flat at 106.2 (revised) in October. NFIB Small Business Survey Capital Expenditure Sub-Index rose by 15.4% in August while New Orders of Communication Equipment rose 1.1% in August. Overall, the current position of the Index suggests that software investment growth should remain elevated over the coming two quarters.