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 held steady at 93.2 from November (revised) to December. In October, Lamb & Mutton Production increased 15%, but Average Precipitation in the Central U.S. dropped 40%. Overall, the Index continues to point to slower growth in agricultural machinery investment over the next three to six months.

Construction Machinery

Investment in Construction Machinery rose at a 5.6% annual rate in Q3 2018 and is up 13% year-over-year. The Construction Momentum Index was unchanged at 98.4 from November (revised) to December. Shipments of Construction Machinery fell 0.7% in September, but Real Consumer Spending rose 0.4% in October, its eighth consecutive increase. Overall, the Index points to steady growth in construction machinery investment over the next three to six months.

Materials Handling Equipment

Investment in Materials Handling Equipment increased at a 7.6% annual rate in Q3 2018 and is up 6.0% year-over-year. The Materials Handling Momentum Index rose from 99.1 (revised) in November to 101.3 in December. Unfilled Orders of Materials Handling Equipment increased 0.7% in September, and Manufacturing Employment rose 0.3% in October, its largest increase since December 2017. Overall, the Index points to moderate growth in materials handling equipment investment over the next two quarters.

Other Industrial Equipment

Investment in All Other Industrial Equipment rose at an 11% annual rate in Q3 2018 and is up 3.8% from a year ago. The Other Industrial Equipment Momentum Index increased from 83.1 (revised) in November to 85.3 in December. Inventories of Machinery rose 1.2% in September, but Industrial Production for Manufacturing declined 1.5% in October, its sixth decrease over the past seven months. Overall, the Index continues to point to weak and potentially negative growth in other industrial equipment investment over the next three to six months.

Medical Equipment

Investment in Medical Equipment expanded at an 11% annual rate in Q3 2018 and is up 9.4% year-over-year. The Medical Equipment Momentum Index decreased from 85.7 (revised) in November to 83.5 in December, its third consecutive decline. Manufacturers' New Orders of Non-Defense Capital Goods fell 2.6% in September, while Spending on Hospital Construction declined 1.4% in October. 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 22% annual rate in Q3 2018 and is down 10% year-over-year. The Mining & Oilfield Machinery Momentum Index fell from 93.4 (revised) in November to 91.9 in December. In October, Unemployment in North Dakota rose 3.7%, while Sales of Light Trucks fell 1.4%. Overall, the Index points to continued weakness in mining & oilfield machinery investment over the next three to six months.

Aircraft

Investment in Aircraft dropped 19% (annualized) in Q3 2018 and is down 5.7% on a year-over-year basis. The Aircraft Momentum Index held steady at 94.7 from November (revised) to December. Exports of Civilian Aircraft jumped 30% in September, its second straight double-digit gain, but Shipments of Non-Defense Aircraft & Parts dropped 14% in October. Overall, the Index points to an improvement 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 is down 1.0% year-over-year. The Ships & Boats Momentum Index rose from 119.8 (revised) in November to 120.7 in December. Industrial Production for Ship & Boat Building increased 0.9% in October, while Container Moves at the Port of Houston rose 4.6%. Overall, the Index continues to indicate stronger growth in ships and boats investment over the next three to six months.

Railroad Equipment

Investment in Railroad Equipment declined at a 15% annual rate in Q3 2018 and is down 4.8% year-over-year. The Railroad Equipment Momentum Index fell from 107.3 (revised) in November to 103.9 in December. Industrial Production for Mining edged down 0.3% in October, but Rail Carloads of Petroleum Products jumped 24%. Overall, despite recent declines, the Index suggests an increase in railroad equipment investment growth over the next two quarters.

Trucks

Investment in Trucks rose at an 8.5% annual rate in Q3 2018 and is up 15% from year-ago levels. The Trucks Momentum Index declined from 97.1 (revised) in November to 95.2 in December. Average Hourly Earnings for Truck Transportation rose 0.3% in September, but Shipments of Primary Metals decreased 0.9% in October, its sharpest decline since June 2017. Overall, the Index suggests that investment growth in trucks may soften over the next three to six months.

Computers

Investment in Computers decreased at an annual rate of 1.6% in Q3 2018 but is up 5.5% year-over-year. The Computers Momentum Index fell from 100.0 (revised) in November to 97.6 in December. In October, Shipments of Communication Equipment rose 1.8%, but Export Prices of Computers edged down 0.8%. Overall, the Index points to stable growth in computers investment over the next two quarters.

Software

Investment in Software rose at an 8.7% annual rate in Q3 2018 and is up 9.0% year-over-year. The Software Momentum Index held steady at 97.5 from November to December. Shipments of Computers & Related Products increased 2.5% in October, while Business Construction Spending rose 3.4%. Overall, the Index points to continued solid growth in software investment over the next three to six months.