Caterpillar sees no signs of mining improvement

With sales and operations at the ends of the earth, few companies are in a better position to take the pulse of the global economy and the resource sector in particular than Caterpillar.

The world's number one heavy equipment manufacturer has been hit hard by the decline in mining and construction – sales are down more than $20 billion from its peak just four years ago after a drop of over $8 billion last year.

We would expect to see parked machines brought back into service and machine rebuild activity pick up as early indicators of a potential upturn

Peoria, Illinois-based Caterpillar expects another 10% decline in revenue in 2016 to around $42 billion, but executives still can't predict a bottom for the industry.

Asked why the company is again forecasting reduced resource industries sales in 2016, Chairman and CEO Doug Oberhelman said this in a statement:

Mining companies are continuing to cut capital expenditures in response to lower commodity prices and difficult financial conditions for many of them. As a result, machine quoting activity remains at a very low level.

In addition, some machines remain parked, which continues to negatively impact aftermarket sales. We would expect to see parked machines brought back into service and machine rebuild activity pick up as early indicators of a potential upturn – unfortunately, we have not seen these signs of improvement yet.

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