Caterpillar’s great depression ended four months ago, when in March following a record 51 consecutive months of annual declines, its global retail sales posted the first, if modest, monthly increase growing by 1% on the back of a surge in Chinese and other Asia/Pac sales. Since then the trend has accelerated, and in June the company reported that Asia Pac sales rose by 40% Y/Y, which however appears to the next cyclical slowdown following increases of 46%, 47% and 49% in the March-May period. Just as notably, retail sales in the US rose by 2% again, the best performance since May 2015.
The result is that CAT’s global sales have posted the longest positive streak in 51 months, and appear to have put the 4+ year depression in the read view mirror – even if Asian retail sales appear to be slowing once again – and are levitating higher, although as we said last month, just like during the 2011/2012 downturn, it all depends on how “hard” China’s economic slowdown will be over the coming year.
Finally broken down by component, it was a mixed picture with weakness re-emerging amid transportation equipment:
- Power Gen: -7%, after down -10% in April
- Industrial: +10%, after up +4%
- Transportation:-7%, after up +8%
- Oil & Gas: +6%, after down -13%
And while construction industries (thanks China housing) were broadly higher, up 10% in June, a modest decline from May’s 11%, resources – i.e., E&P and others, continue to languish, and were again down 1% in June, following a -3% drop in May, which however was an improvement from the 19% drop in both March and April as commodity producers appear to be finally spending more on capex.
via http://ift.tt/2vATNzx Tyler Durden