Equipment manufacturer Caterpillar is optimistic about market conditions in the mining and resources industries.
The company this week increased its 2018 profits forecast after strong global demand for its machinery during the March quarter boosted its economic performance.
Caterpillar’s sales in the resources industries, including mining, quarrying and aggregates, increased by 31 per cent globally in the March 2018 quarter compared with the same period a year ago. In the Asia-Pacific region, Cat’s sales were 37 per cent higher against last year.
“Compared to the first quarter of 2017, commodity prices remained strong and drove improved market conditions and financial health of mining companies,” Cat reported.
“As a result, mining customers invested in delayed replacement cycles and initiated expansion, resulting in higher equipment sales in the first quarter of 2018.”
Cat expects the strong conditions to continue in mining and resources for the remainder of 2018, helping to increase the company’s sales outlook for the year.
“The company believes global economic conditions and favourable commodity price levels will drive miners to increase capital expenditures in 2018 for both equipment replacement cycles and expansions,” Cat stated.
“In addition, higher machine utilisation levels should support aftermarket parts growth.”
Cat’s global resources industries profit in the March quarter was $378 million, compared with $160 million in the same quarter of last year.
The company is also a leading manufacturing for the construction, energy and transportation industries, which are also expected to deliver growth this year.