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 weakened 34% (annualized) in Q4 2023 and is now 15% below its year-ago level. The Agriculture Momentum Index held steady at 108.7 in March. In January, precipitation levels moved in a positive direction for Agricultural investment, while corn futures weakened 5.4% in February. Based on the Index’s current position and recent movement, annual growth in agriculture machinery investment is expected to improve over the next two quarters.

Construction Machinery

Investment in Construction Machinery ticked up 3.6% (annualized) in Q4 2023 and is 3.2% above its year-ago level. The Construction Momentum Index decreased to 114.2 in March from 116.0 in February. New privately owned homes under construction eased in January, while non-residential transportation construction spending fell 1.4% M/M. Overall, movement in the Index over recent months continues to suggest that annual investment growth in construction machinery should improve over the next two quarters

Materials Handling Equipment

Investment in Materials Handling Equipment increased 10.5% (annualized) in Q4 2023 but is 0.6% below year-ago levels. The Materials Handling Momentum Index improved modestly from 96.6 to 97.2 in March. In February, manufacturing payrolls held steady while the manufacturing PMI improved 2.0%. Overall, the Index’s recent movement suggests that annual materials handling equipment investment growth should improve over the next six months.

Other Industrial Equipment

Investment in All Other Industrial Equipment decreased 6.1% (annualized) in Q4 2023 and remains 2.5 below year-ago levels. The Other Industrial Equipment Momentum Index decreased from 93.0 in February to 91.2 in March. In January, non-residential construction spending worsened slightly, while machinery prices in manufacturers’ inventories worsened 1.0%. Overall, the Index’s position and recent movement suggest that annual growth in other industrial equipment investment is unlikely to improve over the next six months and may worsen

Medical Equipment

Investment in Medical Equipment increased 13% (annualized) in Q4 2023 and is now slightly positive on a Y/Y basis (+0.4%). The Medical Equipment Momentum Index increased from 106.8 to 109.8 in March. In January, the CPI for medical care improved 0.5% while industrial production of medical equipment and supplies worsened 2.0%. Overall, the Index suggests that annual medical equipment investment growth will strengthen over the next six months.

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery increased 58% (annualized) in Q4 2023 and is 12% above year-ago levels. The Mining & Oilfield Machinery Momentum Index slipped in March from 100.9 to 100.0. The EIA for oil production grew 3.3% in December while mining and logging payroll employment held steady in February. Overall, the Index suggests that annual growth in mining & oilfield machinery investment may weaken but should remain positive over the next six months.

Aircraft

Investment in Aircraft decreased at a 23% (annualized) rate in Q4 2023 but remains slightly positive on a Y/Y basis (+2.1%). The Aircraft Momentum Index increased from 99.2 in February to 100.8 in March. Exports of computers and electronic products decreased in December by 8.2% while the ISM New Orders Index increased 2.0%. Overall, while investment is typically volatile in this vertical, the Index suggests little change in aircraft investment growth over the next two quarters.

Ships & Boats

Investment in Ships & Boats fell at a 16% annualized rate in Q4 2023 and is 14% below its year-ago level. The Ships & Boats Momentum Index held steady at 95.2 in March. In January, industrial production of ships and boats worsened 2.1%, while the producer price index for ship repair improved 2.1%. Overall, the Index has been choppy over the last year, and its recent movement and current position point to subdued year-over-year growth in ships & boats investment over the next six months.

Railroad Equipment

Investment in Railroad Equipment decreased 5.6% (annualized) in Q4 2023 but is up 1.9% year-over-year. The Railroad Equipment Momentum Index increased from 96.9 to 99.2 in March. In January, industrial production for petroleum and coal products fell 3.7%, while capacity utilization for transportation equipment improved slightly. Overall, the Index points to little change in annual growth in railroad equipment investment over the coming six months.

Trucks

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Computers

Investment in Computers increased 19% (annualized) in Q4 2023 but is down 2.2% year-over-year. The Computers Momentum Index held steady at 101.7 in March. In February, spending on equipment and software as measured by the Richmond Fed improved, while retail and food services sales worsened 0.8% in January. 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 12% (annualized) in Q4 2023 and is up 8.0% from a year prior. The Software Momentum Index softened from 93.0 to 92.2 in March. In January, average weekly earnings at equipment and merchant wholesalers increased 5.0%, while ISM supplier deliveries worsened 6.7%. Overall, the Index’s position and recent movement suggest that annual software investment growth should remain positive but may cool somewhat over the coming two quarters.