A recent report from the Equipment Leasing & Finance Foundation estimates that investment in ag machinery will increase over the next 3-6 months, after being up 0.3% year-over-year in 3Q19. The report measured an increase in the Agricultural Machinery Momentum index from 96.3 in November to 97.9 in December.
According to the report, after robust growth in 2018, equipment and software investment slowed markedly over the course of 2019 and contracted in the third quarter as the effects of unresolved trade tensions and a slowing global economy took hold. The U.S. manufacturing sector continues to face recession-like conditions, which will provide a weak jump-off point for both the U.S. economy and the equipment industry in 2020. However, a strong labor market and still confident U.S. consumer base should keep the broader economy above water for the time being, even as investment in several key equipment verticals slows or remains weak.