Data shows a 12% growth rate in annual new orders of construction machinery in the U.S., however a softening macroeconomy and deflation in some commodities signal a slowdown in both private nonresidential and total public construction.
Industry-leading economic firm ITR Economics provides heavy-duty equipment market trends to help OEMs stay up to date on top industry information and insights, which can help them make better decisions during 2023.
In our continued analysis, this month’s data shows a 12% growth rate in the annual new orders of construction machinery in the U.S., although a softening macroeconomy and deflation in some commodities signal a slowdown in both private nonresidential and total public construction.
The following provides a summary of key observations across 13 indicators and areas of industry that contribute to today's global economic conditions.
NOTE: All data for charts are supplied by ITR Economics.
US OECD Leading Indicator
The monthly rate-of-change for the U.S. OECD Leading Indicator continued to rise in August.
Based on its historical lead time of roughly three quarters, the Indicator signals near-term cyclical rise in U.S. Industrial Production. However, other evidence such as the inverted Treasury yield curve suggests a later low is more likely.
US OECD Leading IndicatorITR Economics
Four Big European Nations Leading Indicator
The Four Big European Nations Leading Indicator monthly rate-of-change continued to rise in August.
Europe is experiencing high inflation, at 6.1%, while its industrial sector activity is moving lower. This poses a monetary policy challenge, which makes near-term recovery unlikely.
Four Big European Nations Leading IndicatorITR Economics
US Construction Machinery New Orders
Annual U.S. Construction Machinery New Orders totaled $48.1 billion in July, a 12.0% growth rate from one year prior.
Double-digit growth in dollar-denominated New Orders has been prolonged by rising prices. As inflationary pressures soften, expect pricing to contribute less to top-line growth.
US Construction Machinery New OrdersITR Economics
US Mining & Oil Field Machinery Production Index
Annual U.S. Mining and Oil Field Machinery Production has flattened out but was still up 4.2% from one year ago as of August.
Opportunities are more likely to stem from the oil and natural gas sector, which is at record highs and maxing out capacity. Non-oil and gas mining is declining.
US Mining and Oil Field Machinery Production IndexITR Economics
US Industrial Production
U.S. Industrial Production in the three months through August was virtually even with the year-ago level.
Elevated interest rates and built-up inventories will hamper Production and likely result in decline in the coming quarters.
US Industrial ProductionITR Economics
US Farm Machinery & Equipment Shipments
U.S. Farm Machinery and Equipment Shipments in the 12 months through July were 18% below the year-ago level. Meanwhile, annual Production declined but was up 9.3% from its year-ago level.
Shipments and Production trends are deviating, suggesting businesses may be experiencing this business cycle differently depending on where they are in the supply chain.
US Farm Machinery &Equipment ShipmentsITR Economics
US Heavy-Duty Truck Production
Annual U.S. Heavy-Duty Truck Production rose in August, coming in 12.8% above the year-ago level.
Double-digit decline in the Cass Truckload Linehaul Index, an indicator of per-mile truckload pricing excluding fuel costs, suggests likely rate-of-change decline for Truck Production in at least the near term.
US Heavy-Duty Truck ProductionITR Economics
US Defense Capital Goods New Orders
Annual U.S. Defense Capital Goods New Orders in July totaled $167.3 billion, a tick down from the previous month but 19.3% above the year-ago level.
General rise is likely in the months ahead given still-elevated geopolitical tensions.
US Defense Capital Goods New OrdersITR Economics
US Private Nonresidential New Construction
U.S. Private Nonresidential Construction in the three months through July totaled $170.1 billion, up 21.2% from the year-ago level.
A softening macroeconomy and deflation in some commodities signal Construction spending will likely transition from accelerating growth to slowing growth soon.
US Private Nonresidential New ConstructionITR Economics
US Total Public Construction
Annual U.S. Total Public Construction in July came in at $402.4 billion, 10.9% above one year ago. The annual growth rate will likely start to transition to decline in the near term.
State and Local Tax Revenue is in decline, which will weigh on future Construction plans.
US Total Public ConstructionITR Economics
US Mining Production
Annual U.S. Mining Production activity in August was 6.3% higher than one year prior.
Further slowing growth is likely in the near term alongside waning momentum in the U.S. economy. Declining manufacturing suggests softening demand for raw materials.
US Mining ProductionITR Economics
Germany Industrial Production
Germany Industrial Production in the three months through July was 1.2% below the same period one year ago.
Numerous headwinds exist in Europe’s largest economy, including higher energy costs and elevated interest rates. The Germany Manufacturing Purchasing Managers Index suggests further cyclical decline for Industrial Production in at least the near term.
Germany Industrial ProductionITR Economics
Europe Agricultural & Forestry Machinery Production
Annual Europe Agricultural and Forestry Machinery Production in July was 10.6% above the year-ago level.
The European Central Bank raised interest rates further, which may discourage machinery purchases.
Europe Agricultural & Forestry Machinery ProductionITR Economics
