The world’s largest manufacturer of tractors and excavators warned this week that the global economy is slowing faster than the company had expected.
Caterpillar Inc. along with numerous other multi-national manufacturers, including General Electric Co. and Honeywell International, said signs were pointing to slower than expected growth around the world.
Rather than buying new machines, Caterpillar dealers are selling off inventories. This is causing the company to idle some plants.
“As we’ve moved through the year, we’ve seen continued economic weakening and uncertainty,” said Dough Oberhelman, chief executive, Caterpillar.
Part of the slowdown is due to China’s construction industry slowing down. However, the company anticipates China will try to spur its lagging economy.
The global economy may not improve until the second half of 2013, Caterpillar said.