Agricultural Machinery
Investment in Agricultural Machinery increased 2.0% (annualized) in Q3 2019 and is up 0.7% from one year ago. The Agriculture Momentum Index softened from 96.9 (revised) in December to 95.3 in January. Exports of Agricultural Commodities expanded 17% in October, the strongest growth in a year, while the MSCI Commodity Producers Sector Index increased 8.0% in December. Overall, the Index points to a modest improvement in agricultural machinery investment growth over the next six months.
Construction Machinery
Investment in Construction Machinery dropped at a 6.7% annualized rate in Q3 2019 but is up 4.0% year-over-year. The Construction Momentum Index held steady at 93.8 from December (revised) to January. In November, New Privately-Owned Houses fell 6.6%, while Consumer Spending grew 0.3%, the ninth consecutive improvement. Overall, the Index points to modest growth in construction machinery investment over the next six months.
Materials Handling Equipment
Investment in Materials Handling Equipment improved at an 11% annualized rate in Q3 2019 but is flat year-over-year. The Materials Handling Momentum Index increased from 80.4 (revised) in December to 84.0 in January. Primary Energy Consumption pulled back 8.0% in September, but Industrial Production expanded 1.1% in November, the fastest growth in more than two years. Overall, the Index suggests that the rebound in materials handling equipment investment growth should continue over the next two quarters.
Other Industrial Equipment
Investment in All Other Industrial Equipment increased at a 4.5% annualized rate in Q3 2019 and is up 4.3% from a year ago. The Other Industrial Equipment Momentum Index held at 93.1 (revised) from December to January. In November, Manufacturing Employment expanded at its fastest pace in over two decades while the M1 Money Supply grew 0.9%. Overall, the Index points to moderate growth in other industrial equipment investment over the next six months.
Medical Equipment
Investment in Medical Equipment fell at a 5.2% annualized rate in Q3 2019 but improved 1.4% year-over-year. The Medical Equipment Momentum Index increased from 95.5 in December to 98.5 in January, the highest level since April 2018. The Consumer Price Index for Inpatient Hospital Services expanded 0.4% in November, and the S&P 500 Health Care Index grew 3.5% in December. Overall, the Index continues to point to a rebound in medical equipment investment growth over the next two quarters.
Mining & Oilfield Machinery
Investment in Mining & Oilfield Machinery dropped at a 28% annualized rate in Q3 2019 and is down 8.9% year-over-year. The Mining & Oilfield Machinery Momentum Index decreased from 104.2 (revised) in December to 101.7 in January, down from a multi-year high. Capacity Utilization for Petroleum & Coal Products fell 0.9 point to 79.0% in November, the second fastest decline since September 2018, but the WTI Spot Price increased 5.2% in December. Overall, the Index points to a modest improvement in mining & oilfield machinery investment growth over the next six months.
Aircraft
Investment in Aircraft plummeted 82% (annualized) in Q3 2019 and is now 46% below year-over-year levels. The Aircraft Momentum Index edged up from 94.2 in December to 95.0 in January. Mexico Air Traffic fell 32% in September — the fourth double digit decline in 2019 — and Boeing Stock Returns fell 11% in December. Overall, the Index continues to suggest negative growth in aircraft investment over the next two quarters.
Ships & Boats
Investment in Ships & Boats surged at an annualized rate of 37% in Q3 2019 but remains slightly negative (0.9%) on a year-over-year basis. The Ships & Boats Momentum Index improved from 100.9 in December to 102.6 in January. Industrial Production of Ships and Boats grew 2.6% in November, but the Manufacturing Employment Index fell 1.5 points to 45.1 in December, the lowest level since January 2016. Overall, recent movement in the Index potentially signals modest growth in ships and boats investment over the next six months.
Railroad Equipment
Investment in Railroad Equipment expanded at a 13% annualized rate in Q3 2019 and is up 16% year-over-year. The Railroad Equipment Momentum Index improved from 72.9 (revised) in December to 75.2 in January. Rail Transportation Employment eased 0.2% in November, while Oil & Gas Rig Counts fell 0.7% in December, the 13th consecutive monthly decline. Overall, the Index continues to indicate slower year-over-year growth in railroad equipment investment over the next six months.
Trucks
Investment in Trucks rose at a 7.0% annualized rate in Q3 2019 and is up 7.0% from year-ago levels. The Trucks Momentum Index decreased from 98.4 (revised) in December to 96.7. Shipments of Light Trucks & Utility Vehicles fell 3.2% in October, while Capacity Utilization for Furniture Manufacturing fell 0.4 percentage points to 75.5% in November. Overall, the Index points to weaker growth in trucks investment over the next six months.
Computers
Investment in Computers pulled back at an annualized rate of 29% in Q3 2019 and eased 0.7% year-over-year. The Computers Momentum Index ticked up from 92.7 (revised) in December to 93.5 in January, the second lowest level since mid-2016. Computer Exports decreased 2.7% in October, while the ISM Manufacturing PMI fell 0.9 points to 47.2 in December, the lowest level since the end of the Great Recession. Overall, the Index points to continued weakness in computers investment growth over the next two quarters.
Software
Investment in Software improved at a 10% annualized rate in Q3 2019 and is up 10% year-over-year. The Software Momentum Index ticked up from 98.2 in December to 98.3 in January. Shipments of Computers & Related Products grew 9.1% in November, the sharpest improvement since mid-2018, while the S&P 500 Software & Services Index increased 2.1% in December. Overall, the Index points to continued strength in software investment growth over the next two quarters.
