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 edged down 1.2% (annualized) in Q2 2021 but is up 26% from one year ago. The Agriculture Momentum Index fell from 100.9 (revised) in August to 96.4 in September. In July, Export Prices of Food, Feed, and Beverages increased by 1.3% while Lamb & Mutton Production fell by 5.3%. Overall, recent movement of the Index suggests that agriculture machinery investment growth may ease in coming months, though Y/Y growth will likely remain in the positive territory.

Construction Machinery

Investment in Construction Machinery grew 17% (annualized) in Q2 2021 and is 31% above its year-ago level. The Construction Momentum Index ticked up from 109.9 (revised) in August to 110.7 in September. Construction Prices for Single-Family Homes increased 1.7% and the Commercial Property Price Index rose by 2.4% in July. Overall, the current position of the Index suggests construction machinery investment growth will remain elevated over the next six months.

Materials Handling Equipment

Investment in Materials Handling Equipment expanded 7.4% (annualized) in Q2 2021 and is up 17% year-above year-ago levels. The Materials Handling Momentum Index edged up from 104.6 (revised) in August to 105.9 in September, the highest level in nearly a decade. In July, Inventories of Materials Handling Equipment increased 1.9% and Unfilled Orders for Materials Handling Equipment rose 2.1%. Overall, the elevated position of the Index indicates that materials handling equipment investment growth should stay strong over the next six months.

Other Industrial Equipment

Investment in All Other Industrial Equipment expanded 50% (annualized) in Q2 2021 and rose by 22% Y/Y. The Other Industrial Equipment Momentum Index was unchanged from August to September at 116.7. Domestic Manufacturing & Trade Sales ticked up 0.4% in June and Machinery Industrial Production rose 1.9% in July. Overall, the position of the Index indicates that other industrial equipment investment growth should remain robust over the next two quarters.

Medical Equipment

Investment in Medical Equipment ticked up 3.1% (annualized) in Q2 2021 and is up 20% over-year. The Medical Equipment Momentum Index decreased from 100.0 (revised) in August to 98.4 in September. In July, Consumer Prices for Physician’s Services ticked up 0.4% and Consumer Spending on Professional Medical Services edged up by 0.1%, the weakest growth since March. Overall, the recent movement of the Index suggests that medical equipment investment growth is likely to continue decelerating over the coming two quarters, though growth should stay in positive territory.

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery rose 11% (annualized) in Q2 2021 and is 2.9% above year-ago levels. The Mining & Oilfield Machinery Momentum Index increased from 110.9 (revised) in August to 112.4 in September, the highest level in nine years. Mining, Oil, and Gas Field Machinery Industrial production rose by 5.3% in July and Mining & Logging Employment ticked up 0.6% in August. The Index’s position suggests that mining & oilfield equipment investment growth should accelerate further over the next two quarters.

Aircraft

Investment in Aircraft surged 119% (annualized) in Q2 2021 and is 169% above year-ago levels. The Aircraft Momentum Index eased from 114.5 (revised) in August to 109.4 in September. Aerospace Exports to Canada increased 3.0% in July while the Market Cap of Southwest Airlines declined by 1.5% in August. Overall, The Index suggests that aircraft investment growth will remain in the positive territory over the next six months, though Y/Y growth will likely decelerate.

Ships & Boats

Investment in Ships & Boats surged at an annualized rate of 140% in Q2 2021 and is 64% above its year-ago level. The Ships & Boats Momentum Index increased from 109.3 (revised) in August to 113.0 in September. In July, New Orders of Ships and Boats surged 160% and Houston Shipping Container Traffic increased by 1.7%. Overall, the current position of the Index suggests that ships & boats investment growth should remain robust over the next two quarters.

Railroad Equipment

Investment in Railroad Equipment fell 20% (annualized) in Q2 2021 and is down 3.8% year-over-year. The Railroad Equipment Momentum Index inched up from 98.3 (revised) in August to 99.8 in September. The Unemployment Rate fell 0.2pp in August while Rail Carloads of Metallic Ores & Metals increased by 2.1%. Overall, the current position of the Index suggests that railroad equipment investment growth should continue to improve over the next six months.

Trucks

Investment in Trucks grew 33% (annualized) in Q2 2021 and is up 61% from year-ago levels. The Trucks Momentum Index increased from 107.6 (revised) in August to 110.9 in September. In July, Industrial Production of Light Trucks increased by 17.1% and Earnings for Freight Trucking increased by 1.8%. Overall, the Index’s position indicates that investment growth should remain healthy over the coming two quarters, though growth may have peaked.

Computers

Investment in Computers fell 38% (annualized) in Q2 2021 but is up 8.0% year-over-year. The Computers Momentum fell from 124.5 (revised) in August to 119.1 in September. In July, Capacity Utilization for Computer & Electronic Product Manufacturing ticked up by 0.6% while Computers & Electronic Products Exports declined by 5.5%. Overall, the Index suggests that computers investment growth should remain in positive territory over the next six months.

Software

Investment in Software increased 16% (annualized) in Q2 2021 and is up 15% from a year prior. The Software Momentum Index fell from 111.2 (revised) in August to 108.2 in September. Shipments of Computers & Related Products increased by 1.2% while Prices for Computer Software & Accessories ticked down by 0.5% in July. Overall, the current position of the Index suggests that software investment growth should remain elevated over the coming six months.