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 declined 12% (annualized) in Q3 2021 and is down 4.2% from one year ago. The Agriculture Momentum Index increased from 91.8 in December (revised) to 93.3 in January. Unmanufactured Tobacco Exports plunged 50.9% in October while Food and Beverage Consumption Spending grew by 0.7% in November. Overall, the Index’s position suggests that agriculture machinery investment growth is unlikely to improve over the coming six months.

Construction Machinery

Investment in Construction Machinery rose 18% (annualized) in Q3 2021 and is 24% above its year-ago level. The Construction Momentum Index dropped from 109.1 in December (revised) to 102.5 in January. Shipments of Construction Machinery fell 4.6% in October and Housing Permits fell 5.9% in November. Overall, the Index’s position and recent movement point to slowing construction machinery investment growth over the coming two quarters.

Materials Handling Equipment

Investment in Materials Handling Equipment decreased 4.7% (annualized) in Q3 2021 but is up 6.6% from year-ago levels. The Materials Handling Momentum Index edged down from 103.9 in December (revised) to 102.6 in January. Unfilled Orders of Materials Handling Equipment rose 1.4% in October and Export Prices of Materials Handling Equipment increased 1.0% in November. Overall, the Index’s position suggests that materials handling investment growth has likely peaked, though growth is expected to remain positive over the coming two quarters.

Other Industrial Equipment

Investment in All Other Industrial Equipment expanded 13% (annualized) in Q3 2021 and rose 22% Y/Y. The Other Industrial Equipment Momentum Index decreased from 106.3 in December (revised) to 103.1 in January. Machinery Industrial Production fell 0.7% in November while the Economic Policy Uncertainty Index rose 9.0% in December. Overall, the Index’s recent movement and position point to decelerating other industrial equipment investment growth over the coming two quarters.

Medical Equipment

Investment in Medical Equipment rose 9.5% (annualized) in Q3 2021 and is up 11% year-over-year. The Medical Equipment Momentum Index fell from 98.4 in December (revised) to 95.2 in January. In November, the Consumer Price Index for Medical Care Services edged up 0.3% while Industrial Production for Medical Equipment and Supplies fell 0.6%. Overall, the Index’s position and recent movement suggest that medical equipment investment growth will continue to decelerate over the coming six months, though growth should remain in positive territory.

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery increased 21% (annualized) in Q3 2021 and is 17% above year-ago levels. The Mining & Oilfield Machinery Momentum Index inched up from 103.9 in December (revised) to 104.9 in January. In November, Crude Oil Production increased 1.7% and Mining, Oil, and Gas Field Machinery Inventories rose 0.8%. The current position of the Index suggests that mining & oilfield machinery investment growth should remain robust over the next six months.

Aircraft

Investment in Aircraft fell 3.7% (annualized) in Q3 2021 but is 72% above year-ago levels. The Aircraft Momentum Index edged up from 105.1 from December (revised) to 106.1 in January. Southwest Airline’s Market Cap fell 3.5% in December while Defense & Space Products Industrial Production rose 3.0% in November. Overall, the Index’s recent movement and position indicate that aircraft investment growth will likely slow over the next six months, though growth is expected to remain in positive territory.

Ships & Boats

Investment in Ships & Boats decreased at an annualized rate of 21% in Q3 2021 but is 17% above its year-ago level. The Ships & Boats Momentum Index decreased from 104.5 in December (revised) to 102.7 in January. Inventories of Ships and Boats increased 3.3% in October while Houston Shipping Container Traffic fell 4.2% in November. Overall, the Index’s position and recent movement suggest that ships & boats investment growth has likely peaked, though growth is expected to remain in healthy territory over the coming two quarters.

Railroad Equipment

Investment in Railroad Equipment grew 52% (annualized) in Q3 2021 and is up 8.9% year-over-year. The Railroad Equipment Momentum held steady at 100.1 from December (revised) to January. In November, Rail Carloads of Coal surged 28.4% while Rail Carloads of Metallic Ores and Metals jumped 13%. Overall, the current position of the Index suggests that railroad equipment investment growth should remain robust over the next six months.

Trucks

Investment in Trucks fell 28% (annualized) in Q3 2021 but is up 14% from year-ago levels. The Trucks Momentum Index declined from 112.7 in December (revised) to 108.5 in January. Manufacturers’ Inventories of Light Trucks & Utility Vehicles declined 3.8% in October while Motor Vehicles and Parts Industrial Production rose 2.2% in November. Overall, the position and recent movement of the Index indicate that trucks investment growth should remain healthy over the coming two quarters.

Computers

Investment in Computers increased 12% (annualized) in Q3 2021 and is up 5.5% year-over-year. The Computers Momentum Index decreased from 112.6 in December (revised) to 110.5 in January. In October, Computers & Electronic Products Exports rose 4.9% while New Orders of Defense Search and Navigation Equipment fell 6.5%. Overall, the Index suggests that computers investment growth is unlikely to accelerate over the next six months.

Software

Investment in Software increased 9.3% (annualized) in Q3 2021 and is up 15% from a year prior. The Software Momentum Index declined from 105.8 in December (revised) to 102.9 in January. In November, Prices for Computer Software & Accessories fell by 1.4% while New Orders of Communication Equipment rose by 11.1%. Overall, the Index’s position and recent movement suggest that software investment growth has likely peaked, though growth is expected to remain in healthy territory over the coming two quarters.