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 worsened 37% (annualized) in Q4 2023 and is now 16% below its year-ago level. The Agriculture Momentum Index held steady at 108.8 in February. In December, poultry production declined 6.1% M/M while rice exports improved 16.8% M/M. Based on the Index’s current position and recent movement, annual growth in agriculture machinery investment is expected to rebound over the next two quarters.

Construction Machinery

Investment in Construction Machinery ticked up 0.4% (annualized) in Q4 2023 and is 2.4% above its year-ago level. The Construction Momentum Index increased to 117.0 in February from 113.2 in January. Consumer sentiment rose 11.7% in January, following an improvement in housing starts in December. Overall, the Index indicates that annual investment growth in construction machinery should improve over the next two quarters.

Materials Handling Equipment

Investment in Materials Handling Equipment increased 8.9% (annualized) in Q4 2023 but is 1.0% below year-ago levels. The Materials Handling Momentum Index improved modestly from 95.9 to 96.6 in February. In December, current prices on material handling equipment weakened 6.1% while manufacturing payrolls increased 0.2%. Overall, the Index’s recent movement suggests that annual materials handling equipment investment growth should continue to improve over the next six months.

Other Industrial Equipment

Investment in All Other Industrial Equipment increased 0.7% (annualized) in Q4 2023 but remains slightly below year-ago levels (-0.7%). The Other Industrial Equipment Momentum Index held steady at 90.4 in February. In December, Industrial Production worsened 0.1% while Fed’s Nominal Advanced Foreign Economics Index improved 2.3%. Overall, the Index’s position and recent movement suggest that annual growth in other industrial equipment investment is likely to remain flat over the next six months.

Medical Equipment

Investment in Medical Equipment increased 17% (annualized) in Q4 2023 and is now slightly positive on a Y/Y basis (+1.3%). The Medical Equipment Momentum Index increased from 105.3 to 107.5 in February. In December, the CPI for dental services improved 0.8% while the CPI for medical care grew 0.6%. Overall, the Index suggests that annual medical equipment investment growth will improve over the next six months.

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery increased 57% (annualized) in Q4 2023 and is 12% above year-ago levels. The Mining & Oilfield Machinery Momentum Index eased in February from 106.1 to 104.3. The EIA for coal worsened 4.1% in December while mining and logging payroll employment expanded. Overall, the Index suggests that annual growth in mining & oilfield machinery investment will 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 96.7 to 98.4 in February. Exports of computers and electronic products decreased in November by 2.4% while the ISM New Orders Index increased 4.2%. Overall, the Index suggests that annual investment growth in aircraft should hold steady over the next two quarters.

Ships & Boats

Investment in Ships & Boats fell at a 2.1% annualized rate in Q4 2023 and is 11% below its year-ago level. The Ships & Boats Momentum Index decreased from 94.9 to 92.4 in February. In December, disposable personal income improved slightly while total container trade worsened 2.9%. Overall, while the Index has been unusually volatile in over the last year, its recent movement and current position point to improved year-over-year growth in ships & boats investment over the next six months.

Railroad Equipment

Investment in Railroad Equipment increased 3.6% (annualized) in Q4 2023 and is up 4.3% year-over-year. The Railroad Equipment Momentum Index fell sharply in February, from 95.3 to 90.6. In January, grain carloads originated dropped 7.9% alongside a 5.3% decrease in oil imports. Overall, the Index suggests that annual growth in railroad equipment investment is likely to slow and may turn negative over the coming six months.

Trucks

Investment in Trucks decreased 22% (annualized) in Q4 2023 but remains 4.3% above year-ago levels. The Trucks Momentum Index held steady at 80.8 in February. In January, metal production of raw steel decreased 0.2% while furniture capacity utilization improved 1.3%. Overall, the Index indicates that annual investment growth in trucks may slow over the coming two quarters.

Computers

Investment in Computers increased 39% (annualized) in Q4 2023 and is up 1.7% year-over-year. The Computers Momentum Index increased for the fourth consecutive month in February, from 98.2 to 101.8. In January, the Supplier Deliveries Index increased 5.9% while retail and food services sales improved 0.6%. 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 6.4% (annualized) in Q4 2023 and is up 6.6% from a year prior. The Software Momentum Index held steady at 92.2 in February. In November, revolving debt increased 1.5% while the Richmond Fed’s index on equipment or software spending worsened slightly. Overall, the Index’s position and recent movement suggest that annual software investment growth may cool somewhat but should remain solidly positive over the coming two quarters.