Michelle Chapman
AP – Caterpillar’s sales surged in the final quarter of the year despite ongoing disruptions in the global supply chain that have hit almost every sector of the economy.
Sales climbed 23 per cent to USD13.8 billion, the construction machinery company said yesterday, topping Wall Street expectations of USD13.36 billion, according to a survey of industry analysts by Zacks Investment Research forecast.
Construction industry sales rose 27 per cent, driven by an improvement in dealer inventories, higher end-user demand and increased prices. Dealers lowered inventories more in the year-ago period.
Sales in the resource industries segment also climbed 27 per cent on higher end-user demand for equipment and aftermarket parts, and higher prices. End-user demand was higher in mining and heavy construction and quarry and aggregates.
The United States (US) economy grew last year at the fastest pace since Ronald Reagan’s presidency. The nation’s gross domestic product – its total output of goods and services – expanded 5.7 per cent in 2021. It was the strongest calendar-year growth since a 7.2 per cent surge in 1984 after a previous recession. The economy ended the year by growing at an unexpectedly brisk 6.9 per cent annual pace from October through December as businesses replenished their inventories, the Commerce Department reported on Thursday.
Surging growth in the US as it emerges from the pandemic has contributed to shortages of supplies, from gears and rubber, to computer chips.
“Amid ongoing supply chain constraints, our team continues to execute our strategy for long-term profitable growth while striving to meet customer demand,” CEO Jim Umpleby said in a prepared statement.
But the pandemic has created other massive shifts, including a migration to larger homes that could accommodate people working, or going to school, from home.
Sales of new single family homes rose in December to their highest level in 10 months. The increase put the seasonally adjusted annual sales pace to 811,000 for the month, according to the Commerce Department on Wednesday, an 11.9 per cent increase over November’s figure, which was revised down to 725,000 from 744,000.
In that environment, demand for Caterpillar’s yellow-and-black machinery has surged.
