Tough Times Continue for Caterpillar - Global Trade Magazine
  December 28th, 2015 | Written by

Tough Times Continue for Caterpillar

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  • Caterpillar has seen sales declines due to commodity prices crash, weak demand in mining sector, and the China slowdown.
  • Caterpillar saw its biggest overseas sales decline in Latin America, with a 36-percent slump.
  • Caterpillar is looking at the fourth consecutive year of decline, the longest period of decline in its 90-year history.

Caterpillar Inc. has reported a 16-percent decline in its global retail sales for the three months ending in October, the biggest monthly decline since February 2010.

Year-to-date, the mining and heavy equipment manufacturer’s sales have dropped by an average 12 percent and, so far this year, the previous worst performances were seen in January and June, where sales in both months slumped 14 percent.

Overall, the Illinois-headquartered company has seen its sales growth in the red for 35 consecutive months due to the crash in commodity prices, weak demand in the global mining sector, and the slowdown in China.

According to Caterpillar’s October sales report, the company saw its biggest overseas sales decline in Latin America, where it saw a 36 percent slump. Sales in Asia Pacific were down 28 percent, while the Europe-Africa-Middle East region and North America saw declines of 13 percent and 8 percent, respectively.

Overall sales in the company’s three main industry sectors – resource and mining, construction, and energy and transportation – saw declines of 25 percent, 14 percent and 27 percent, respectively.

With the five-percent downtick in revenues predicted for 2016, Caterpillar is looking at the fourth consecutive year of decline, the longest period of decline in its 90-year history.

According to analysts, the disappointing performance is due to weak economic growth in the U.S. exacerbated by weak infrastructure investment, tepid growth in the European Union, recession in Brazil and lower commodity prices.

In China alone, a braking of the country’s China’s mining sector has led Caterpillar to shrink its market projection for hydraulic excavators to 23,000 units compared to sales of 112,000 during the peak year of 2010.


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