Caterpillar Says Strong Construction Demand Signals US Will Avert Recession

Caterpillar Inc. sees strong demand for construction equipment in North America.

(Bloomberg) — Caterpillar Inc. sees strong demand for construction equipment in North America.

North America is one of the best markets for heavy machinery like Caterpillar’s excavators and wheel-loaders right now, Chief Financial Officer Andrew Bonfield said during an Evercore ISI event Wednesday. His comments come as the industry gears up for a major conference in Las Vegas next week, the first time the gathering has been held since the pandemic.

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Caterpillar shares have gained this year despite ongoing concern that the Federal Reserve’s efforts to tackle inflation will trigger an economic downturn. If the company sees material costs drop, it may not be able to justify raising prices on machines, Bonfield said.

One exception to the pickup in machinery demand has been new mining truck purchases. Bonfield said the equipment age of the mining fleet still hasn’t reached a peak and the slow growth is a result of miners’ spending discipline. But the transition to cleaner energy will boost metals consumption, making the mining cycle longer and more sustainable for machinery demand, he said.

(Corrects to omit references to recession in headline and first paragraph published March 8)

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