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 5.9% (annualized) in Q3 2018 but is up 14% from one year ago. The Agriculture Momentum Index decreased from 95.5 (revised) in January to 89.2 in February, its lowest level since June 2016. Shipments of Farm Machinery & Equipment fell 0.6% in October, while Inventories of Meat, Poultry, & Seafood decreased 0.7%. Overall, the Index points to weaker and potentially negative agricultural machinery investment growth over the next three to six months.

Construction Machinery

Investment in Construction Machinery rose at a 4.7% annual rate in Q3 2018 and is up 13% year-over-year. The Construction Momentum Index fell from 100.0 (revised) in January to 97.6 in February. Construction Employment rose 0.7% in January, but the Consumer Sentiment Index dropped 7.2%, its sharpest decrease in over six years. Overall, the Index suggests stable growth in construction machinery investment over the next three to six months.

Materials Handling Equipment

Investment in Materials Handling Equipment increased at a 7.2% annual rate in Q3 2018 and is up 5.9% year-over-year. The Materials Handling Momentum Index rose from 99.8 (revised) in December to 100.5 in January, its fifth consecutive increase. Inventories of Materials Handling Equipment expanded 1.3% in October, while Manufacturing Employment increased 0.2% in December. Overall, the Index points to moderate growth in materials handling equipment investment growth over the next two quarters.

Other Industrial Equipment

Investment in All Other Industrial Equipment expanded at an 11% annual rate in Q3 2018 and is up 3.7% from a year ago. The Other Industrial Equipment Momentum Index slipped from 93.0 (revised) in January to 92.3 in February. Exports Prices of Industrial Supplies & Materials declined 3.2% in December, but the Manufacturing Purchasing Managers’ Index increased to 56.6 in January and has remained above the expansionary threshold for nearly three years. Overall, the Index suggests stable growth in other industrial equipment investment over the next three to six months.

Medical Equipment

Investment in Medical Equipment rose at an 11% annual rate in Q3 2018 and is up 9.4% year-over-year. The Medical Equipment Momentum Index decreased from 96.9 (revised) in January to 93.8 in February. Private Hospital Construction Spending fell 7.2% in November, and Capacity Utilization for Electrical Equipment Manufacturing edged down 0.1 percentage point to 76.6% in December. Overall, the Index points to slower growth in medical equipment investment over the next two quarters.

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery declined at a 23% annual rate in Q3 2018 and is down 11% year-over-year. The Mining & Oilfield Machinery Momentum Index increased from 100.8 (revised) in January to 102.5 in February. Motor Gasoline Production fell 2.1% in December, but the Bloomberg Precious Metals Index rose 3.0% in January. Overall, the Index points to a potential improvement in mining & oilfield machinery investment growth over the next three to six months.

Aircraft

Investment in Aircraft decreased 19% (annualized) in Q3 2018 and is down 5.7% on a year-over-year basis. The Aircraft Momentum Index moderated from 95.0 (revised) in January to 94.1 in February. Unfilled Orders of Defense Aircraft & Parts rose 2.9% in November, while the S&P 500 Volatility Index dropped 35% in January, its sharpest decline in over three years. Overall, the Index points to further weakening in aircraft investment growth over the next two quarters.

Ships & Boats

Investment in Ships & Boats surged at an annual rate of 52% in Q3 2018 but edged down 1.1% year-over-year. The Ships & Boats Momentum Index increased from 109.1 (revised) in January to 113.6 in February. In December, Container Moves at Houston Ports fell 2.2%, but Industrial Production for Ship & Boat Building rose 3.0%. Overall, the Index indicates stronger growth in ships and boats investment over the next three to six months.

Railroad Equipment

Investment in Railroad Equipment declined at a 16% annual rate in Q3 2018 and is down 5.1% year-over-year. The Railroad Equipment Momentum Index rose from 90.2 (revised) in January to 92.5 in February. Rail Carloads of Petroleum Products jumped 23% in December, but the Unemployment Rate rose 0.1 percentage point to 4% in January. Overall, the Index indicates the potential for an improvement in railroad equipment investment growth over the next three to six months.

Trucks

Investment in Trucks rose at a 9.4% annual rate in Q3 2018 and is up 15% from year-ago levels. The Trucks Momentum Index held steady at 105.6 from January (revised) to February. Industrial Production for Light Trucks rose 7.7% in December, while Earnings for Truck Transportation increased 0.8%. Overall, the Index suggests continued strong growth in trucks investment over the next three to six months.

Computers

Investment in Computers decreased at an annual rate of 2.3% in Q3 2018 but is up 5.4% year-over-year. The Computers Momentum Index was unchanged at 104.9 from January (revised) to February. Industrial Production for Computers & Electronic Products rose 1.3% in December, but Computer Export Prices fell 0.8%, its third consecutive decrease. Overall, the Index points to stable growth in computers investment over the next two quarters.

Software

Investment in Software increased at a 9.1% annual rate in Q3 2018 and is also up 9.1% year-over-year. The Software Momentum Index fell from 99.0 (revised) in January to 95.6 in February. Shipments of Computers & Related Products decreased 1.6% in November, while the Producer Price Index for Software Publishers fell 2.8% in December (the largest monthly decline in more than nine years). Overall, the Index points to weaker growth in software investment over the next three to six months.