Agricultural Machinery
Investment in Agricultural Machinery decreased 24% (annualized) in Q4 2024 and is now 4.9% below its year-ago level. The Agriculture Machinery Momentum Index improved from 100.9 to 103.4 in February. In December, poultry production increased 5.2% M/M, while hog exports decreased 66% M/M. Overall, the Index continues to point to subdued or negative annual growth in agriculture machinery investment over the next six months.
Construction Machinery
Investment in Construction Machinery fell 14% (annualized) in Q4 2024 and is 13% below its year-ago level. The Construction Machinery Momentum Index rose from 109.3 in January to 114.0 in February. In December, new homes under construction increased 16% M/M, while the value of durable goods and construction machinery fell 8.5% Y/Y. Overall, the Index suggests that annual growth in construction machinery has bottomed out and should improve over the next two quarters.
Materials Handling Equipment
Investment in Materials Handling Equipment decreased 4.8% (annualized) in Q4 2024 and is 0.7% below year-ago levels. The Materials Handling Equipment Momentum Index held steady at 90.5 in February. While manufactured durable goods inventories decreased 6.1% M/M in December, manufacturing and trade sales rose 0.3% M/M in November. Overall, the Index’s recent movement suggests that annual investment growth in materials handling equipment is likely to be weakly positive over the next six months.
Other Industrial Equipment
Investment in All Other Industrial Equipment rose 4.9% (annualized) in Q4 2024 and is up 4.7% on a year-over-year basis. The Other Industrial Equipment Momentum Index rose from 87.0 to 89.4 in February. In December, industrial production prices rose 0.9% M/M, and the capacity utilization for fabricated metal products increased 0.9% M/M. Overall, the Index points to muted annual investment growth in other industrial equipment over the next two quarters.
Medical Equipment
Investment in Medical Equipment rose 1.3% (annualized) in Q4 2024 but is down 0.4% on a Y/Y basis. The Medical Equipment Momentum Index fell sharply from 100.0 in January to 94.7 in February. In December, industrial production of medical equipment fell 1.2% M/M, while the CPI for medical care ticked up 0.1% M/M. Overall, the Index’s recent trajectory suggests that annual growth in medical equipment should be weakly positive over the next two quarters. However, this month’s sharp decline in momentum is worth monitoring.
Mining & Oilfield Machinery
Investment in Mining & Oilfield Machinery fell at a 18% annualized rate in Q3 2024 and is 1.4% below year-ago levels. The Mining & Oilfield Machinery Momentum Index rose from 95.8 in December to 97.5 in January. In December, the ISM Manufacturing Purchasing Manager’s Index (PMI) rose 1.9% M/M, and new orders of mining and oilfield machinery goods grew 15% Y/Y in November. Overall, recent movements in the Index suggest that annual investment growth in mining and oilfield machinery should improve over the next six months
Aircraft
Investment in Aircraft fell at a 69% annualized rate in Q4 2024 but is up 31% on an annual basis. The Aircraft Momentum Index decreased from 101.7 in January to 99.2 in February. In January, the ISM New Orders Index fell 5.7% M/M, while prices for aerospace and miscellaneous transportation equipment increased 6.3% M/M in December. The Index suggests that annual investment growth in aircraft may slow but should remain positive over the coming two quarters.
Ships & Boats
Investment in Ships & Boats increased 59% (annualized) in Q4 2024 and is 6.4% above its year-ago levels. The Ships & Boats Momentum Index edged down from 99.2 in January to 97.6 in February. In December, industrial production of ships and boats increased 0.5% Y/Y, while traffic at the Port of Long Beach fell 2.6% M/M. Overall, the Index suggests that annual investment growth in ships and boats may slow over the next two quarters but should remain positive.
Railroad Equipment
Investment in Railroad Equipment fell 19% (annualized) in Q4 2024 but is up 18% year-over-year. The Railroad Equipment Momentum Index fell from 95.3 to 90.6 in February. In January, the ISM Supplier Deliveries Index rose 1.6% M/M, while rail carloads of farm and food products excluding grain decreased 18% M/M. Overall, the Index suggests annual growth in railroad equipment investment is likely to slow over the next six months but should remain positive.
Trucks
Investment in Trucks rose 21% (annualized) in Q4 2024 and is up 1.1% from a year prior. The Trucks Momentum Index slipped from 93.6 to 92.0 in February. While raw steel production decreased 21% M/M in January, industrial production of light trucks rose 1.3% M/M in December. Overall, the Index suggests that annual investment growth in trucks will remain muted over the next two quarters.
Computers
Investment in Computers fell 23% (annualized) in Q4 2024 but is up 13% on a year-over-year basis. The Computers Momentum Index rose from 107.6 in January to 110.2 in February. Computer systems design and related services payrolls increased 3.5% M/M in January, and shipments of computer equipment rose 3.7% Y/Y in December. Overall, the weak investment reading in Q4 was a surprise and likely a head-fake; the Index continues to suggest strong annual investment growth in computers over the next six months.
Software
Investment in Software increased 4.3% (annualized) in Q4 2024 and is 4.9% above year-ago levels. The Software Momentum Index edged up from 96.1 to 96.9 in February. In December, overall industrial production rose 0.9% M/M, and average weekly earnings for computer and software merchant wholesalers rose 8.7% M/M. Overall, the Index points to solid annual investment growth in software over the coming two quarters.
