Positive Signals for 2021 Showing in Some Sectors

Four consecutive months of rise in both the U.S. and Europe Leading Indicators signal potential recovery and expansion of the industrial sector in the first half of 2021. U.S. and Germany Industrial Production have seen some positivity as well, although rising COVID-19 cases in both countries could present challenges to this.

Agricultural machinery production has seen some increases, but were down compared to the previous year in both the U.S. and Europe. Near-term recovery is currently anticipated for Europe while declining U.S. exports are likely to contribute to downside pressure into early 2021.. 

READ MORE: Heavy Equipment Markets are Down in 2020 and Hopes up for a Better 2021


View the corresponding Equipment Market Outlook charts for more data

NOTE: All data for charts supplied by ITR Economics

Europe Agriculture and Farm Machinery Production [return to nav]
  • Europe Agricultural and Forestry Machinery Production tentatively transitioned to Phase A, Recovery, in June. Annual Production rose in July but was down 9.4% from 1 year ago.
  • The ITR Checking Points™ system suggests recovery will persist in at least the near term. 
    Europe Agriculture Machinery Production
China Diesel Bus Production [return to nav]
  • China Large Diesel Bus Production during the 12 months through July totaled 25.4 thousand units, down 17.8% from 1 year ago.
  • Monthly Production in each of July and August was down more than 50% from those respective months in 2019. Be prepared for acute business cycle decline in this market in at least the near term. 
    China Large Diesel Bus Production
U.S. Industrial Production [return to nav]
  • The U.S. Industrial Production quarterly rate-of-change rose further in August, marking two consecutive months of rise.
  • Rising U.S. leading indicators portend further quarterly rate-of-change rise ahead. Secondary business shutdowns in response to the potential combination of rising COVID-19 cases and the onset of fall flu season would pose a downside risk. 
    Us Industrial Production
U.S. Leading Indicator [return to nav]
  • The Conference Board’s U.S. Leading Indicator rose in August.
  • Four consecutive months of rise in the Leading Indicator signal probable recovery and expansion for the U.S. industrial sector beginning in the first half of next year.
Us Leading Indindicator

U.S. Private Nonresidential New Construction [return to nav]
  • U.S. Private Nonresidential Construction totaled $120.0 billion for May, June, and July, coming in 3.3% below the same 3 months 1 year ago.
  • Decline in multiple architecture billings indexes and in the Construction Backlog Indicator suggest Construction business cycle decline will persist in at least the coming quarters.
Us Private Nonresidential New
U.S. Construction Machinery, New Orders [return to nav]
  • U.S. Construction Machinery New Orders during the 12 months through July totaled $31.4 billion, down 9.4% from the year-ago level.
  • Certain sectors of construction, such as single-family housing, are faring comparatively well through the COVID-19 pandemic and may provide relatively greater growth opportunities.
Us Construction Machinery New Orders
U.S. Farm Machinery Production [return to nav]
  • Annual U.S. Farm Machinery and Equipment Supplies Shipments totaled $21.9 billion in July and were down 5.7% from July 2019.
  • Year-over-year decline in quarterly U.S. Exports of Farm Machinery and Equipment will contribute to downside pressure on Shipments into early 2021. 
    Us Farm Machinery
U.S. Total Public New Construction [return to nav]
  • Annual U.S. Total Public Construction totaled $346.4 billion in July, up 7.4% from the year-ago level.
  • Annual Construction is expected to move further along the back side of the business cycle in the coming quarters, as public construction projects face funding limitations given the backdrop of a recession and the need to divert resources toward combatting COVID-19.  
    Us Total Public New Construction
North American Rotary Rig Count [return to nav]
  • The annual average North American Rotary Rig Count fell to 742 rigs in August, down 37.8% from 1 year ago. The most recent 3-month Rig Count was down more than 70% from the same 3 months 1 year earlier.
  • General upward movement in U.S. Crude Oil Futures Prices may incentivize investment for new rigs in 2021, which bodes well for the Rig Count next year.
North American Rotary Rig Count
U.S. Defense Industry, New Orders [return to nav]
  • Annual U.S. Defense Capital Goods New Orders totaled $163.3 billion in July, up 8.0% from 1 year ago.
  • The ITR Checking Points™ system is signaling burgeoning upward momentum in New Orders’ Defense Aircraft and Parts component.
    Us Defense Capital
U.S. Heavy-Duty Truck Production [return to nav]
  • Annual U.S. Heavy-Duty Truck Production reached the lowest level in over 9 years and was down 34.9% year over year.
  • As the U.S. economy is recovering during 2021, the increased transport of goods will drive up demand for heavy-duty trucks. 
    Us Heavy Duty Trucks
Europe Leading Indicator [return to nav]
  • The Europe Leading Indicator edged higher in August.
  • With four consecutive months of rise in the Leading Indicator, we have strong empirical evidence that the European industrial sector will likely transition to a business cycle rising trend in the first half of 2021. 
    Europe Leading Indicator
Germany Industrial Production [return to nav]
  • Quarterly Germany Industrial Production was down 16.1% in July.
  • Rise in the Germany Leading Indicator augurs for quarterly rate-of-change ascent in Production late this year. Given Germany's rising COVID-19 case count, the possibility of broad-based shutdowns poses a downside risk. 
    Germany Industrial Production