National Post (National Edition)
Caterpillar mirrors surging economic tide
‘GOOD HARBINGER’
JOE DEAUX If you want more evidence of a broadening expansion in the global economy, look no further than Caterpillar Inc.
Surging Chinese demand and an improving U.S. economy have lifted sales of Caterpillar’s signature yellow mining and construction machines. With the pace of growth quickening in Latin America and Europe, the company is projecting higher earnings for 2018 than analysts estimated.
The outlook from Caterpillar, considered an economic bellwether, comes as industries from manufacturing to services report increased sales and orders that have fueled record equity prices and buoyed investor expectations for this year. This week, the International Monetary Fund raised its estimate for 2018 global growth to the fastest in seven years.
“Caterpillar’s results showed strength across the board in nearly every industry for the first time, which indicated coordinated and synchronized macroeconomic growth,” Larry De Maria, an analyst at William Blair & Co., said in an interview. “It’s a good harbinger for overall economic activity.”
The company’s stock dipped slightly Thursday as U.S. President Donald Trump’s protectionist agenda fueled worries about the future of global trade, sparking an early drop in broader market indexes, De Maria said.