dailyimpact | In order to have an industrial
economy you have to build industrial things — roads, ports, buildings,
power stations and their grids, airports, houses and shopping centers —
and you have to replace them when they wear out. Such building is the
activity on which an industrial society rests, the primary source of
jobs and all the consequent economic activity that flows from people
with jobs. What every one of these building projects needs, in addition
to capital and workers, is heavy machinery. That is why the health of
Caterpillar, the world’s dominant manufacturer of heavy equipment, and
to a lesser extent England”s JCB, are taken as precursors of the world’s
financial health.
Call hospice.
It’s bad enough the Caterpillar’s
world sales were down 11% year-to-year in August, worse that they have
declined by a similar amount every month this year. What is truly awful
is that Caterpillar has a string of such sales declines — on average 10% per month — going back almost three years.
It’s the longest stretch of sales declines in the history of the
company. To those who regard Caterpillar as a bellwether, and it has
been reliable in the past, our future is going to be called the Second
Great Depression.
