Q3 2024 data, U.S. steel scrap prices and elevated interest rates suggest near-term downward pressure for construction machinery new orders, despite gains in recent months.
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.
With an eye on interest rates, third-quarter 2024 data suggests slowing growth for new orders of construction machinery, although this area saw a record high $51.4 billion in May, positioning this market 8.4% above the year-over-year level.
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
Following a rising trend, the monthly rate-of-change for the U.S. OECD Leading Indicator moved horizontally in recent months.
The Indicator suggests near-term upward momentum for the industrial sector, followed by steadying growth late this year. However, analysis of a broader range of evidence suggests a plateau for the industrial sector through the end of this year.
U.S. OECD Leading IndicatorITR Economics
Four Big European Nations Leading Indicator
The Four Big European Nations Leading Indicator monthly rate-of-change ticked up from May to June. The Indicator rate-of-change has been generally moving horizontally with a slight downward bias.
Europe Industrial Production has declined 3.5% since early 2023. Leading indicator evidence still suggests that Production will decline into late 2024.
Four Big European Nations Leading IndicatorITR Economics
US Construction Machinery New Orders
Annual U.S. Construction Machinery New Orders were at a record-high $51.4 billion in May and were 8.4% above the year-ago level.
Growth is slowing for New Orders and U.S. Steel Scrap Prices suggest some near-term downward pressure. Elevated interest rates are also applying downside pressure on this market, given that large machinery purchases are interest-rate sensitive.
U.S. Construction Machinery New OrdersITR Economics
US Mining & Oil Field Machinery Production Index
U.S. Mining and Oil Field Machinery Production in the 12 months through June was 3.6% below the year-ago level.
Recession will continue in at least the near term given mild downward pressure on the macroeconomy.
U.S. Mining & Oil Field Machinery Production IndexITR Economics
US Industrial Production
U.S. Industrial Production in the three months through June was roughly even with the year-ago level.
We anticipate that Production will generally plateau rather than decline outright. Consumers face some financial pressures from prolonged high inflation, but rising incomes and labor market dynamics suggest that this is temporary.
U.S. Industrial ProductionITR Economics
US Farm Machinery Shipments
Annual U.S. Farm Machinery Shipments rose in May and were 6.6% below the year-ago level.
Shipments have risen 3.8% since the start of 2024 and rise is likely to persist; however, elevated interest rates pose a downside risk.
U.S. Farm Machinery ShipmentsITR Economics
US Heavy-Duty Truck Production
Annual U.S. Heavy-Duty Truck Production declined in June but remains above the year-ago level by 1.4%.
Production will decline in the coming quarters following slowing macroeconomic activity. Upward rate-of-change movement in per-mile truckload pricing suggests demand is nearing an inflection point toward recovery, though the positive impact on Production may take time to develop.
U.S. Heavy-Duty Truck ProductionITR Economics
US Defense Capital Goods New Orders
U.S. Defense Capital Goods New Orders in the 12 months through May totaled $155.9 billion, 6.9% below the year-ago level.
Trends in the Geopolitical Risk Index, a measure of news sentiment toward global geopolitical risk, suggest that rate-of-change rise in New Orders will occur in the near term.
U.S. Defense Capital Goods New OrdersITR Economics
US Private Nonresidential Construction
U.S. Private Nonresidential Construction rose in the three months through May to 5.2% higher than the year-ago level. Historical data was revised by the U.S. Census Bureau.
Previous negativity in residential construction and decline in the U.S. Architectural Billings Index suggest a transition to general decline for Construction in the latter half of 2024.
U.S. Private Nonresidential ConstructionITR Economics
US Total Public Construction
U.S. Total Public Construction in the 12 months through May totaled $471.2 billion, 16.3% above the year-ago level. Historical data was revised by the U.S. Census Bureau.
The annual growth rate ticked down in May. Growth will likely continue to slow this year as signaled by prior slowdown in U.S. State and Local Tax Revenue.
U.S. Total Public ConstructionITR Economics
US Mining Production
Annual U.S. Mining Production through June was 1.0% above the year-ago level.
The oil and gas sector is rising as the non-oil segment contracts. Leading indicators suggest improved conditions on the horizon in 2025.
U.S. Mining ProductionITR Economics
Germany Industrial Production
Germany Industrial Production in the three months through May was 6.3% below the year-ago level.
Markit Economics’ Eurozone Manufacturing Purchasing Managers Index signals a potential inflection point in the near term. Downside pressures may not worsen for much longer, but they will likely linger in the coming quarters.
Germany Industrial ProductionITR Economics
Europe Agricultural & Forestry Machinery Production
Annual Europe Agricultural and Forestry Machinery Production in May was 13.2% below the year-ago level.
ITR Checking Points suggest further decline in the near term for Production, although recent ECB rate cuts pose an upside in the medium term.
Europe Agricultural & Forestry Machinery ProductionITR Economics
