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 increased 46% (annualized) in Q1 2024 and is now 11% above its year-ago level. The Agriculture Momentum Index ticked down from 110.6 to 109.7 in June. In April, poultry broiler exports expanded 2.1% M/M, while raw tobacco exports expanded significantly in March. Based on the Index’s current position and recent movement, annual growth in agriculture machinery investment is expected to remain positive over the next two quarters.

Construction Machinery

Investment in Construction Machinery ticked up 0.3 (annualized) in Q1 2024 and is 1.8% above its year-ago level. The Construction Momentum Index fell sharply in June, from 109.3 to 103.7. In April, ownership of new homes under construction decreased 1.4% M/M, while University of Michigan’s Current Economic Conditions Index weakened 12% in May. Overall, movement in the Index over recent months suggests that annual investment growth in construction machinery will turn negative over the next two quarters.

Materials Handling Equipment

Investment in Materials Handling Equipment increased 5.8% (annualized) in Q1 2024 and is 2.2% above year-ago levels. The Materials Handling Momentum Index decreased from 91.2 in May to 87.8 in June. Manufacturing payrolls increased 0.1% in May, while manufacturers’ inventories for materials handling equipment rose 1.3% in April. Overall, the Index’s recent movement suggests that annual investment growth in materials handling equipment will remain weak and could turn negative over the next six months.

Other Industrial Equipment

Investment in All Other Industrial Equipment increased 17% (annualized) in Q1 2024 and is slightly below year-ago levels (-0.8%). The Other Industrial Equipment Momentum Index increased from 90.4 in May to 93.9 in June. In March, equipment steel prices jumped 17% M/M, more than offsetting a slight contraction in private non-residential construction spending in April. Overall, the Index’s position and recent movement suggest that annual investment growth in other industrial equipment may have bottomed out and should begin to improve over the next six months.

Medical Equipment

Investment in Medical Equipment decreased 7.3% (annualized) in Q1 2024 but is up 0.5% on a Y/Y basis. The Medical Equipment Momentum Index fell sharply in June, from 105.3 to 100.8. In April, the CPI for physician’s services increased 0.1% M/M, while the CPI for overall medical care increased 0.4% M/M in April. Overall, the Index’s recent movement suggests that medical equipment investment growth is likely to weaken and may turn negative over the next six months.

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery decreased 25% (annualized) in Q1 2024 and is down 5.7% from year-ago levels. The Mining & Oilfield Machinery Momentum Index fell from 89.4 in May to 87.8 in June. While crude oil production increased 7.5% in April, coal production fell 19%. Overall, the Index suggests that annual growth in mining & oilfield machinery investment will remain negative over the next six months.

Aircraft

Investment in Aircraft decreased at a 76% (annualized) rate in Q1 2024 and is down 17% on an annual basis. The Aircraft Momentum Index increased from 99.2 in April to 102.5 in May. Exports of computers and electronic products rose 3.8% in April compared to a year ago, while imports of civilian aircraft expanded 32% M/M. Overall, recent movement in the Index suggests that aircraft investment growth may improve over the next two quarters.

Ships & Boats

Investment in Ships & Boats fell at a 29% annualized rate in Q1 2024 and is 21% below its year-ago level. The Ships & Boats Momentum Index increased from 96.8 in May to 98.4 in June. In April, manufacturer’s inventories of ships & boats expanded 1.9%, while the ISM Purchasing Managers Index for Services rose 8.9%. Overall, the Index’s current position suggests that annual growth in ships & boats investment will likely remain negative over the next six months. However, recent data have been encouraging, and a return to positive Y/Y investment growth before the end of the year is possible.

Railroad Equipment

Investment in Railroad Equipment decreased 5.6% (annualized) in Q1 2024 and is down 6.3% year-over-year. The Railroad Equipment Momentum Index decreased from 96.9 to 94.5 in June. In May, originations of carloads of grain weakened 28%, alongside a 20% contraction of carloads of farm & food products excluding grain. Overall, the Index points to continued sluggishness in railroad equipment investment growth over the coming six months.

Trucks

Investment in Trucks increased 6.5% (annualized) in Q1 2024 and is 5.7% above year-ago levels. The Trucks Momentum Index increased from 95.2 to 100.8 in June. In April, industrial production for light trucks improved 1.4% while average hourly earnings for general freight trucking employees increased 1.0%. Overall, the Index indicates that annual investment growth in trucks should improve over the next six months.

Computers

Investment in Computers increased 42% (annualized) in Q1 2024 and is up 11% on a year-over-year basis. The Computers Momentum Index increased from 104.2 in May to 105.9 in June. In May, the ISM Supplier Deliveries Index increased 8.7% M/M, while the value of shipments of communication equipment increased 1.3% in April relative to its year-ago level. Overall, the Index’s current position and recent movement point to stronger year-over-year investment growth in computers over the next six months.

Software

Investment in Software rose 9.8% (annualized) in Q1 2024 and is up 8.5% from a year prior. The Software Momentum Index improved from 89.8 to 93.0 in June. In May, the ISM Supplier Deliveries Index increased 8.7% M/M, while industrial production ticked up modestly in April. Overall, the Index points to continued solid annual investment growth in software over the next two quarters.