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 increased 26% (annualized) in Q4 2020 and is up 13% from one year ago. The Agriculture Momentum Index edged down from 110.8 (revised) in January to 110.0 in February. Lamb & Mutton Production rose by 13.2% in December, while Unmanufactured Tobacco Exports fell by 7.0% in November. Overall, the Index’s elevated position points to accelerating agriculture machinery investment growth over the next 1-2 quarters.

Construction Machinery

Investment in Construction Machinery expanded 16% (annualized) in Q4 2020 but was down 8.5% year-over-year. The Construction Momentum Index was unchanged at 100.0 (revised) from January to February. Mobile Homes Shipments grew by 1.0% in November, while Construction Machinery Shipments were 1% above their year ago level — the strongest growth since late 2019. Overall, the Index’s current position suggests that construction machinery investment growth should improve over the next 3-6 months.

Materials Handling Equipment

Investment in Materials Handling Equipment grew at a 30% annualized rate in Q4 2020 and was 8.4% above its year-ago level. The Materials Handling Momentum Index rose from 87.5 (revised) in January to 92.3 in February, the highest level in two years. Industrial Sector Energy Consumption rose by 7.3% in October, while Materials Handing Equipment Exports increased by 18.0% in November. Overall, the Index’s sharp improvement and elevated position point to accelerating materials handling equipment investment growth over the next one to two quarters.

Other Industrial Equipment

Investment in All Other Industrial Equipment rose 22% (annualized) in Q4 2020 but was 1.9% below year-ago levels. The Other Industrial Equipment Momentum Index rose from 116.7 (revised) in January to 118.3 in February, the highest level since mid-2011. In December, Capacity Utilization for Electrical Equipment Manufacturing grew by 2.0% and Exports Prices of Industrial Supplies & Materials rose by 3.3%. Overall, the Index points to a strong rebound in other industrial equipment investment growth over the next 1-2 quarters.

Medical Equipment

IInvestment in Medical Equipment rose 19% (annualized) in Q4 2020 and was up 19% year-over-year. The Medical Equipment Momentum Index improved from 106.9 (revised) in January to 107.6 in February, the highest level in over 12 years. Consumer Spending on Professional Medical Services increased 1.4% in December while S&P 500 Health Care Index rose by 1.3% in January. Overall, the Index points to continued, robust medical equipment investment growth over the next six months.

Mining & Oilfield Machinery

Investment in Mining & Oilfield Machinery dropped 37% (annualized) in Q3 2020 and is down 18% compared to a year ago. The Mining & Oilfield Machinery Momentum Index rose from 93.0 (revised) in December to 97.7 in January, the highest reading since early 2018. Brent crude prices rose 9.4% in December, while Motor Gasoline Production fell by 2.5% in November. Overall, the Index points to improving investment growth in mining & oilfield equipment over the next six months, though year/year growth may remain negative during the first half of the year.

Aircraft

Investment in Aircraft surged 252% (annualized) in Q4 2020 but was 33% below year-ago levels. The Aircraft Momentum Index increased from 109.4 in January to 110.2 in February, the highest reading in over a decade. While Capacity Utilization increased 1.6 percentage points in December, the S&P 500 Volatility Index rose 47.2% in January. Sharp increases in the Index suggest that aircraft investment growth should improve in the next three to six months, though year/year growth may remain negative given the magnitude of the investment collapse in 2020.

Ships & Boats

Investment in Ships & Boats rose at an annualized rate of 12% in Q4 2020 and grew 1.4% year-over-year. The Ships & Boats Momentum Index edged down from 112.4 (revised) in January to 111.4 in February. Houston Shipping Container Traffic edged up by 0.6% in December, while the Emerging Market Economies Currency Index increased by 0.6% in January. Overall, the Index points to modest growth in ships & boats investment over the next two quarters.

Railroad Equipment

Investment in Railroad Equipment fell 13% (annualized) in Q4 2020 and was down 5.1% year-over-year. The Railroad Equipment Momentum Index increased from 102.2 (revised) in January to 103.7 in February, the highest level since mid-2012. In January, the Oil Rig Count surged by 10.5% and Rail Carloads of Metallic Ores & Metals jumped by 10.4%. Overall, the Index continues to point to a rebound in railroad equipment investment growth over the next two quarters.

Trucks

Investment in Trucks surged 50% (annualized) in Q4 2020 but was down 9.3% from year-ago levels. The Trucks Momentum Index fell from 138.7 in January to 130.3 in February. In December, Shipments of Light Trucks & Utility Vehicles rose 5.8% and Capacity Utilization for Furniture Manufacturing increased by 1.6 percentage points. Though the Index eased somewhat this month, its high position still points to a strong rebound in trucks investment growth over the next six months.

Computers

Investment in Computers jumped 19% (annualized) in Q4 2020 and was up 26% year-over-year. The Computers Momentum Index decreased from 121.3 (revised) in January to 117.0 in February. In December, Exports of Computers jumped 10%, though the ISM PMI dipped by 3.0%. Overall, the Index suggests that computers investment growth should remain robust over the next six months.

Software

Investment in Software rose 8.2% (annualized) in Q4 2020 and grew 5.2% from a year prior. The Software Momentum Index edged up from 98.7 (revised) in January to 99.6 in February. Prices for Computer Software & Accessories increased by 1.7% in December, while M1 Money Supply rose 5.8 percentage points in January. The Index suggests that software investment growth may accelerate over the next two quarters.