Morgan Stanley reported that its Capital Goods Momentum Index (CAPMI) increased by 5 points to register a reading of 58 in July. The month-over-month advance signals accelerating growth across the components the investment bank monitors.
Regionally, the US sub-index rose 5 points, Europe also gained 5 points, and the Asia-Pacific measure climbed 3 points. The Global sub-index recorded the largest single-month improvement, rising 7 points.
In the United States, the lift in the reading was concentrated in General Industrial, Automotive, Oil & Gas and HVAC sectors. The report noted a minor offset from weakness in land freight, which somewhat tempered overall US momentum.
Europe’s uptick was supported by strength coming from Germany and construction-related activity, according to the bank’s breakdown of sector performance.
Performance across Asia-Pacific was more mixed. China and Japan were identified as drags on the regional figure, while India contributed an improvement. Morgan Stanley highlighted that part of the Asia-Pacific improvement reflected statistical effects - a weak April result exited the moving average window, which helped lift the month’s reading.
The Global sub-index benefited from advances in General Industrial and Aerospace sectors, contributing to its 7-point gain for the month.
The CAPMI is constructed to measure month-over-month momentum across 48 global macro and industry indicators. Its weighting is 42% North America exposure, 19% Europe, 19% Asia-Pacific and 21% Global data. The index tracks major end markets including Aerospace, Automotive, Construction, Oil & Gas, HVAC, Power and Technology.
By construction, a reading above 50 on the CAPMI signals accelerating growth on a monthly basis, while a reading below 50 indicates decelerating growth. The index’s central value is 50, which represents stable month-to-month trends.
July’s reading at 58 therefore places the composite measure clearly in expansion territory, reflecting broad sectoral and regional gains, though the report flags that part of the Asia-Pacific lift owes to the removal of a weak April observation from the moving average calculation.