While positive momentum in some areas, such as construction machinery orders, may suggest improvement, the potential for mild macroeconomic decline still looms for several areas of the economy.
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 in 2024.
In our continued analysis, this month’s data indicates that while positive momentum in some areas, such as construction machinery orders, may suggest improvement, the potential for mild macroeconomic decline is looming for more than half of the areas of industry highlighted in this report.
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 rose in November, its fourth consecutive month in positive territory after an extended period of negativity.
Rise in this indicator could be attributed to strength in several of its components, such as housing starts and stock prices. However, we expect other factors (such as suppressed inflation-adjusted savings, the lagged macroeconomic impact of elevated interest rates, and rising loan delinquencies) will outweigh this influence and contribute to general — albeit mild — macroeconomic decline in 2024.
US OECD Leading IndicatorITR Economics
Four Big European Nations Leading Indicator
The Four Big European Nations Leading Indicator monthly rate of change ticked down 0.1 percentage point in November, breaking a string of 13 consecutive months of rise.
Annual Europe Industrial Production was 1.4% below the year-ago level as it begins to feel the weight of prior interest rate increases; expect decline to persist in at least the coming quarters.
Four Big European Nations Leading IndicatorITR Economics
US Construction Machinery New Orders
Annual U.S. Construction Machinery New Orders were 13.7% above the year-ago level.
New Orders are particularly sensitive to interest rate pressures; expect slowing growth ahead and eventual recession as firms look to rent, rather than buy, machinery.
US Construction Machinery New OrdersITR Economics
US Mining & Oil Field Machinery Production Index
Annual average Production is declining, though it was still 1.5% above the year-ago level in November.
General decline in the U.S. Mining Capacity Utilization Rate portends further downward movement for Production, though downward pressure will likely be mild as oil prices are still above breakeven production costs, incentivizing investment.
US Mining and Oil Field Machinery Production IndexITR Economics
US Industrial Production
Quarterly Industrial Production in November was 0.5% below the year-ago level.
General decline in the U.S. Total Industry Capacity Utilization Rate — coupled with dwindling consumer health, tighter credit conditions, and the inverted Treasury yield curve — signal that additional decline is probable in at least the coming quarters.
US Industrial ProductionITR Economics
US Farm Machinery & Equipment Shipments
U.S. Farm Machinery and Equipment Shipments in the 12 months through October were 21.3% below the year-ago level.
We anticipate a near-term trough in Shipments, signaled by recent positive stock performance for major companies within the industry, such as Caterpillar and John Deere, though trends in Farm Proprietors Income suggest that any recovery will be weak.
US Farm Machinery and Equipment ShipmentsITR Economics
US Heavy-Duty Truck Production
Annual U.S. Heavy-Duty Truck Production is declining off a tentative August 2023 peak, though it still came in 2.4% above the year-ago level in November.
Declining tonnage shipped will be a likely contributor to further decline in Production.
US Heavy-Duty Truck ProductionITR Economics
US Defense Capital Goods New Orders
Annual U.S. Defense Capital Goods New Orders in October totaled $169.1 billion, 16.7% above the year-ago level.
Despite this upward movement, we anticipate further decline on a rate-of-change basis for New Orders, predicated on recent developments in failed attempts to pass security assistance aid to Ukraine and Israel.
US Defense Capital Goods New OrdersITR Economics
US Private Nonresidential New Construction
U.S. Private Nonresidential Construction in the three months through October came in 23.4% above the same three months one year ago; growth is accelerating.
Annual Construction will likely hit a peak soon, as financing costs for new projects become untenable following prolonged rate hikes and as the effect of generally slowing macroeconomic growth begins to impact Construction spending.
US Private Nonresidential New ConstructionITR Economics
US Total Public Construction
Annual U.S. Total Public Construction came in at $422.8 billion in October and is in an accelerating growth trend, up 13.9% year over year.
Further growth is likely on the horizon in the long term as funds from the infrastructure bill are disbursed and spent.
US Total Public ConstructionITR Economics
US Mining Production
U.S. Mining Production in the 12 months through November came in 4.9% above the year-ago level; growth is slowing.
We anticipate eventual mild decline in Production as the macroeconomy enters recession, with mildness attributed to relative strength in oil and gas.
US Mining ProductionITR Economics
Germany Industrial Production
Germany Industrial Production in the three months through October was 3.6% below the same three months one year earlier.
As an export-heavy country, Germany’s industrial sector will face challenges alongside its trading partners in the coming quarters.
Germany Industrial ProductionITR Economics
Europe Agricultural & Forestry Machinery Production
Annual Europe Agricultural and Forestry Machinery Production is declining off a tentative June peak, though it remains 5.3% above the year-ago level.
Prior interest rate hikes in Europe could spell continued decline in Production as companies pull back on capital investments, including investments in agricultural and forestry machinery.
Europe Agricultural and Forestry Machinery ProductionITR Economics
