Manufacturing Foot Traffic: May Trends Soft Outside of CAT

Research evidence excerpt

Manufacturing Foot Traffic: May Trends Soft Outside of CAT

Current consensus forecasts 2Q CI volumes up ~14%, RI volumes up ~8%, and E&T

volumes up 12% y/y. Foot traffic data suggests 2Q production volumes are at least ~in-line, if not

potentially coming in better than expected. CAT R3M foot traffic is correlated with Machines+E&T

volume growth at the 0.74 level, making it a useful directional tool, in our view.

Paccar (Ex 6 & Ex 7). PCAR saw local monthly visits decline 26% Y/Y in May as R3M data read

down ~25%. Consensus sees Class 8 NA industry production down ~8.3% in 2Q26, with PCAR NA

truck deliveries down ~11% in the quarter. The HD truck market continues to be pressured by a

weak macro and high interest rates, though orders suggest production should improve in 2H on '27

EPA 'Pre-Buy'. PCAR R3M foot traffic data exhibits a 0.75 correlation with class 8 truck growth.

Deere (Ex 8 & Ex 9). Local monthly visits were down 7% Y/Y in May, bringing the R3M data

down to a ~1.5% decline Y/Y following Apr. up ~1% and Mar. up ~2%. Consensus has F2Q26 net

equipment volumes up ~1.5%, which is higher than the May foot traffic read. We note, however,

that correlations for DE are slightly weaker than for the rest of the group at ~0.59.

Manufacturing Facility Foot Traffic. We examine a basket of manufacturing locations for CARR, CAT,

PCAR, and DE to determine their foot traffic. The resulting index and growth figures are useful in Stephen Volkmann, CFA * | Equity Analyst

determining relative and directional trends, though they should not be interpreted as exact figures. (212) 284-2031 | svolkmann@jefferies.com

Chirag Patel * | Equity Associate

To determine the potential predictive use of our dataset, we study the relationship and correlation (212) 284-1773 | cpatel@jefferies.com