If Caterpillar's Data Is Right, This Is A Global Industrial Depression

Tyler Durden's picture

Most cats bounce at least once when they die, but not this one: after CAT posted its first annual drop in retail sales in December of 2012, it has failed to see a rise in retail sales even once.

In fact, since then Caterpillar has seen 34 consecutive months of declining global sales, and 11 consecutive months of double digit declines!

Why is this important? Because a month ago we asked: "What On Earth Is Going On With Caterpillar Sales?"

We have been covering the ongoing collapse in global manufacturing as tracked by Caterpillar retail sales for so long that there is nothing much to add.


Below we show the latest monthly data from CAT which is once again in negative territory across the board, but more importantly, the global headline retail drop (down another 11% in August) has been contracting for 33 consecutive months! This is not a recession; in fact the nearly 3 year constant contraction - the longest negative stretch in company history - is beyond what most economists would deem a depression.

We got the answer just three days later when the industrial bellwether confirmed the world is now in an industrial recession, when it not only slashed its earnings outlook, but announced it would fire a record 10,000.

Moments ago, CAT reported its latest monthly retail sales and they were even worse than last month: in the month of September there was not a single region that posted either a increase of an unchanged print. This was the first month in all of 2015 in which every region posted a drop.


Putting CAT's result in context, the Great Financial Crisis resulted in 19 consecutive months of sales declines. We are currently at 34 months and showing no signs of any pick up.


As such, based on CAT's ongoing shockingly bad retail sales we wonder if it is no longer merely a global recession: perhaps that time has come to call it what it really is - a global industrial (at first) depression, which has so far been hidden from plain view thanks to $13 trillion in central bank liquidity, whose marginal impact is evaporating by the day and a Chinese credit machine which recently hit a brick wall.

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Newsboy's picture

"AAaauugh, Global Depression!"

lostintheflood's picture

"AAaauugh, Global Depression!"

molon labe....

NoDebt's picture

The Chinese could never copy the designs of our American-made bulldozers and make cheaper copies that would compete with Caterpillar.

NoDebt's picture

And, as always, I am glad none of this can affect the price of my stawks.

greenskeeper carl's picture

if anything, it should make them go up, right? bad news is good news. Clearly this means we are in need of moar central bank intervention. Bullish....

Haus-Targaryen's picture

Nope, this is nothing but propaganda.  Everything is AwEsOMe! 

jeff montanye's picture

xcmg, perhaps the most successful chinese heavy equipment manufacturer, has seen its stock go from above 8 in 2011 to about 4 now.

sunaJ's picture


I appreciate the idea of CAT being one of many guages of the actual industrial slowdown as opposed to cooked numbers and the markit as it is presented, but can it also be attributed to the fact that CAT is not the bellweather that it has been in the past?  You have hundreds of foreign (Asian) industrial and commercial companies whose very purpose is to produce what CAT produces and for cheaper prices.  These companies have come online in the mining and mega-machine manufacturing sectors much in the last decade.  Could not one also attribute CAT's decline to increased competition from cheaper industrial/commercial manufacturers?  If you look at the sales by region, N.A. seems to also be the last region to get the memo. 


You say they cannot copy CAT's designs, I believe copying is what they are best at, and if they can make it half the quality for half the cost, then what is the advantage of making the highest quality?  Re: this, I would never say never.



Osmium's picture

He forgot the /sarc tag

sunaJ's picture

Doh, I'm usually pretty good at spotting that.  Well, his statement makes much more sense then.


Save_America1st's picture

so no channel stuffing of CATs and zero interest buy one, get one free deals?  C'mon, let's get creative.  There's gotta be a way to tax-payer subsize puting a CAT in every fucking yard in America.  It's our civil right, damnit, and we can't be denied!!!

*disclosure:  I'd really love to have a CAT D11 Dozer preaze ;-)

new game's picture

say that again, i've got some immeadiate uses right now...stumps, home pad, ect ect...

Money Counterfeiter's picture

The Fed would argue they already had their bubble, 2001-07, so stop bitching and wait your turn.

monk27's picture

Guess what: CAT data is right ! Not only that, but I dare you to show me a company producing real stuff (preferably, useful too) that is not in trouble, worldwide.  Draw your own conclusions...

Bunghole's picture

I dont need a D11. 

A nice sized skid steer will do.

C'mon CAT.

Make this eCONomy thrive.

Overfed's picture

So...Cat is showing 34 months of flat sales, what about Komatsu, Kobelco, Hitachi, Liebherr, etc.? If all of 'em are flat and/or declining, then we're on to something.

Escrava Isaura's picture



Good point.

Article lacks empirical evidence/comparison to be taken serious.

Too bad.


Peak Bull's picture

Real stuff and useful. Hint: Colorado, soon Canada. UN pushing.

El Oregonian's picture

I wonder if CAT still loves being used as a tool of Der Emperor Barry's?

Never One Roach's picture
ESPN lays off 300 people as subscriber base shrinks




Who in the world would pay for that stuff anyway?

r00t61's picture

What are the chances that this will be "The Lead" story on Sportscenter?

Bunghole's picture


Soylent for the sheeple.

847328_3527's picture

I hope everyone grabbed one of those $45 ESPN ties before they're all sold out....they're so cool!




ZEN_and_Now's picture

E........EXTRA  S........STUPID  P.........PEOPLES  N..........NETWORK


OH YA!!!!

Mike in GA's picture

Barry's speech hyping the Great Recovery from Cat HQ was their kiss of death.

messymerry's picture

Hey Lost, leggo my labe,,,

I agree sunaj, any meaningful comparison would have to show inroads made by Cat's competitors.  I see a lot of big equipment with weird names on it... 

In saying that though, I think we are well into the early stages of a global socio-economic collapse and the ardent deniers are going to have a very tough time going forward. 

Buckle up kiddos, the ride is beginning,


Son of Loki's picture

Caterpillar BOGO event of the Century!


Buy ONE giant CAT and get the Second one FREE!


It's so Robust!


" Yes we can! "


Coming to a country near you soon.

Tall Tom's picture

CAT Market Share, according to Douche Bank and reported in August, is stable at 12.5%




However Forbes Magazine reported in 2011 that CAT Market Share was in the 32% to 33% range.


CAT has lost an amazing 60% of its Market Share IN FOUR YEARS??? Now I am certain that it hurt their Bottom Line...and you nailed it that it is PARTLY DUE to competition. (It may be MOSTLY...I do NOT know.)


But how much of it is due to a recession in Global Economic Activity?


In order to do any in depth analysis, due to the loss of the Bellweather status that CAT once had, a deeper exploration and in depth analysis of revenues of the competitors is demanded.


Unfortunately the article lacks this exploration and in depth analysis.


Look at Oil Consumption and Industrial Power Consumption if you want to be convinced that we are in an industrial deep depression.


We are.

jack reacher's picture

2 years back, CAT was actually buying the chinese made stuff to reverse engineer some of the features that the chinese had built.

howver previous to that the chinese were buying CATs stuff to reverse engineer it.



Vatican_cameo's picture

There are a few things at work here.  A good portion of Caterpillar equipment is made in China (all the bulldozers, D6 and smaller, for example).  The larger equipment is made here.  Caterpillar only uses virgin metal in all it's domestic machinery, and every nut and bolt is a "Grade 10".  That does make it expensive.  Another issue is that Renting is very popular.  Most companies that have bid jobs that will only last a few years choose to rent the machinery.  Renting is extremely popular, especially here in the Northeast when the weather doesn't always cooperate.  Overall Construction is also, so the need for machinery follows suit.  A lot of negative things happening at once.

Mentaliusanything's picture

Komatsu is not CAT but it's results smell like Horse exhaust. No green shoots just brown shats

847328_3527's picture

What we need is moar Hope & Change!


90% of Los Estados Unidos is already in a depression so it's no surprise CAT reflects reality. It's gonna be sad this Christmas wathcing people pick their their purses for nickels and pennies and dimes to pay for their kids presents, if not their Cheerieos


Sad stuff.

15horses1donkey's picture

No, no intervention, not that again!

Seriously, the only intervention we need is in the cryptocurrency markets. We need a Zero Hedge Coin. First iteration is in the works, help by voting at http://zhc0.com

Nothing better to do during a depression than leave the real markets alone and play on the toy crypto markets. Let's get into it!


I think if you keep pimping this idea on Zero Hedge as a cryptocurrency, I am gonna have to track you down, and bitch slap you into the middle of next week for being a pimp ass bankster schill bitcoin wannabe rat bastard motherfucker.  IF ZERO HEDGE HAD A FUCKING CURRENCY OF IT'S OWN, IT WOULD BE MINTED IN INCORRUPTABLE NON HYPOTHECATED NON DERIVATIVE NON MARGIN ABLE SILVER OR GOLD. Get your shit together, and change your direction while you still have an ass to kick. Jesus, fucking kids these days. You all think technology is a miracle. All it is is electrons that can be made to go poof any fucking minute now. if i blew up your phone right now, you would look like a cow at the slaughterhouse just at the moment the bolt gun goes off - " How could you do this to me ? What'll I do now ? " Improvise. Adapt. Overcome. Triumph over adversity. And, mint a fucking coin out of noble metals, or I will make you look like a one legged man at a nut kicking contest.  

divingengineer's picture

Bulldozers are clearly lasting longer do to many 'hedonistic' improvements.

Ergo, the CPI will be revised down since bulldozers are probably more heavily weighted than food and fuel when determining COLAs and what-not. 

Tyrone Shoelaces's picture

Think of the moneys CAT saved by firing 10 Kilopeople!  Bullish for the bottom line, and stuff!

Cosmicserpent's picture

Nothing more bullish than 300 million unemployed Chinese. Revolution bitchez!

lakecity55's picture

President Xi, we are in a global depression.
This is not good. Too many laid off comrades equals instability and risks Party Rule. General, you have a comment?
Yes, Mr President. I think Comrade Putin may need help in Syria against the alciaduh head-choppers. Perhaps we could draft 200 million guys and throw in with Assad.
I'll take it into consideration. That will certainly keep our young men busy, General.

two hoots's picture

Increased quality/price competition abroad (part of the wanning hegemony thing).

Equipment Rentals increased in slow times.

Miners are finding themselves in a hole and have stopped digging.

Is this a recession, a depression or are we on a downward slope to our new reality?

Sure hope the Fed is not on a fiat spending spree trying to save something that no longer exist?

SomebodySpecial's picture

It would make more sense if they'ed overlaid the top three competitor's sales on the same chart. Oh... MayBe not as sensational?

KnuckleDragger-X's picture

With all this supply all that magical Keynesian demand will show up any time now... "Paging Dr. Krugman, your patient is flat-lining".....

ersatz007's picture

They obviously didn't do enough to stimulate the economy.  More intervention is needed.  

roddy6667's picture

Ever heard of Shantui? Google it.

Before we declare a world-wide depression based on CAT's badly-played hand, let's look at these companies that make heavy equipment. They are working 24/7/265 in China, and haven't whined about tough times.

Komatsu, Hyundai, Hitachi, Daewoo/Doosan, Sany, , Zoomlion, Longking, XCMG, LiuGong, Sumitomo, Volvo, Shantui, Chery, Putzmeister, and Schwing.

NoDebt's picture

That was satire, my friend.  You made my point for me perfectly.

If you are European, I can understand your confusion.  My satire never works on Europeans.  I have no idea why, but Europeans always think I'm being serious.  Americans usually get it right away.

Ghordius's picture

I guess that's because most Americans get the - for them possibly glaring - hint from your use of "stawks", while we Europeans etc., particularly if not raised speaking English, can't differentiate that easily if you truly don't know how words are spelled or not

and this without getting into the little matter of how few non-Americans even bother knowing anything about the "stawk-market", since the 401(k) thing is very, very American

like the amazing 30-year state/fed backed mortgage loan, or cheap gasoline, the US is full of truly (no kidding) exceptional things, viewed from outside

KnuckleDragger-X's picture

But from the inside it's all evil white privilege and must be eradicated. If we knew what we were doing, we wouldn't be doing this.....

seek's picture

Englishp-speaking Russians will get it right away too, I suspect.

I think the key is that growing up with doublespeak means satire is an effective means of communicating since normal language is so corrupted by the government/media. Not that they don't have it in Europe but I don't think it's quite a pervasive and they seem to have a fair number of politicians a that are members of smaller parties that speak truth to power so the satire-spidey-sense isn't nearly so developed.