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 rose 11% (annualized) in Q2 2022 but was down 10% from one year ago. The Agriculture Momentum Index was flat at 105.0 from August (revised) to September. Agricultural Machinery Industrial Production increased 0.7% in July while the Federal Funds Rate rose by 75 basis points in the same month. Overall, the Index’s position and recent movement suggest that agriculture machinery investment growth is likely to remain muted over the next six months.

Construction Machinery

Investment in Construction Machinery jumped 19% (annualized) in Q2 2022 and was 16% above its year-ago level. The Construction Momentum Index rose from 96.3 in August to 98.2 in September. Construction Prices for Single-Family Homes inched up 0.4% while Housing Starts in the Western U.S. fell 4.0% in July. Overall, the Index’s position suggests that construction machinery investment growth is unlikely to improve over the coming two quarters.

Materials Handling Equipment

Investment in Materials Handling Equipment rose 0.8% (annualized) in Q2 2022 but was 0.4% below year-ago levels. The Materials Handling Momentum Index eased from 90.3 in August (revised) to 88.9 in September. The NFIB Small Business Capex Sub-Index was flat and Consumption Spending on Non-Durable Goods fell 1.0% in July. Overall, the Index’s recent movement and position suggest that materials handling equipment investment growth is likely to remain soft over the next two quarters.

Other Industrial Equipment

Investment in All Other Industrial Equipment declined 8.6% (annualized) in Q2 2022 but was up 11% Y/Y. The Other Industrial Equipment Momentum Index dropped sharply from 97.0 in August (revised) to 91.0 in September. The Unemployment Rate rose to 3.7% in August and Energy Consumption eased 0.5% in May. Overall, the Index’s position and recent movement suggest that other industrial equipment investment growth may continue to slow over the coming six months.

Medical Equipment

Investment in All Other Industrial Equipment declined 8.6% (annualized) in Q2 2022 but was up 11% Y/Y. The Other Industrial Equipment Momentum Index dropped sharply from 97.0 in August (revised) to 91.0 in September. The Unemployment Rate rose to 3.7% in August and Energy Consumption eased 0.5% in May. Overall, the Index’s position and recent movement suggest that other industrial equipment investment growth may continue to slow over the coming six months.

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery rose 23% (annualized) in Q2 2022 and was 10% above year-ago levels. The Mining & Oilfield Machinery Momentum Index dipped from 90.9 in August to 89.4 in September. In July, the Brent Spot Price fell 13.4% while Natural Gas Capacity Utilization rose 0.2%. The current position and recent movement of the Index suggest that mining & oilfield machinery investment growth will likely remain strong over the coming two quarters.

Aircraft

Investment in Aircraft increased at a 30% (annualized) rate in Q2 2022 but was 22% below year-ago levels. The Aircraft Momentum Index edged down from 109.0 in August (revised) to 108.2 in September. Total Traffic Departures rose 27% in June, while New Orders for Defense and Aircraft Parts plummeted 50% in July. Overall, the Index’s position and recent movement suggest that aircraft investment growth is unlikely to rebound over the coming two quarters.

Ships & Boats

Investment in Ships & Boats fell at an annualized rate of 8.9% in Q2 2022 and was 7.7% below its year-ago level. The Ships & Boats Momentum Index increased from 118.8 in August (revised) to 120.6 in September. Industrial Production rose 0.6% in July and Consumer Confidence rose 8.3% in August. Overall, the Index’s position and recent movement suggests that ships & boats investment growth could accelerate over the coming six months.

Railroad Equipment

Investment in Railroad Equipment increased 48% (annualized) in Q2 2022 and was up 34% year-over-year. The Railroad Equipment Momentum Index inched down from 100.9 in August to 100.0 in September. In August, Rail Carloads of Petroleum Products fell 1.6% and Total Originated Intermodal Rail Units rose 2.9%. Overall, the current position and recent movement of the Index suggest that railroad equipment investment growth may start to level out but will likely remain strong over the coming six months.

Trucks

Investment in Trucks ticked up 3.0% (annualized) in Q2 2022 but was down 16% from year-ago levels. The Trucks Momentum Index rose from 105.0 in August to 107.5 in September. Shipments of Heavy-Duty Trucks rose 2.6% and Motor Vehicles and Parts Industrial Production increased 6.6% in July. Overall, the position and recent movement of the Index indicate that trucks investment growth may improve in the coming two quarters.

Computers

Investment in Computers dropped 23% (annualized) in Q2 2022 but was up 11% year-over-year. The Computers Momentum Index eased from 102.5 in August to 101.7 in September. The Nasdaq Computer Index dropped 6.1% in August and Capacity Utilization for Computer Manufacturing fell 1.1% in July. Overall, the Index’s position and recent movement suggest that computers investment growth will likely continue to sidewind over the coming six months.

Software

Investment in Software rose 6.9% (annualized) in Q2 2022 and was up 10% from a year prior. The Software Momentum Index dipped from 86.4 in August (revised) to 85.3 in September. The ISM Non-Manufacturing Supplier Deliveries Index fell 6.6% in July and IBM’s share price dropped 1.8% in August. Overall, the Index’s position and recent movement suggest that software investment growth will continue to decelerate over the coming two quarters.