CATERPILLAR is one of the most renowned industrial brands. It makes the kind of heavy machinery—loaders, excavators and off-road trucks—that is used in the construction, mining and transport industries when things need to get dug out or shifted somewhere. But the firm’s latest results, released on January 28th, show that it is struggling to shift its own products. “This past year was a difficult one for many of the industries and customers we serve,” it said. Revenues in 2015 were nearly 15% lower than they were in 2014, and 29% below the 2012 peak.
The company’s woes are emblematic of the problems facing manufacturers worldwide. Although manufacturing is a much smaller part of most developed economies than services—just 12% of output in America, for example—its recent weakness makes many economists nervous about the wider outlook.
Recent data point to the size of the problem. Big jobs cuts have been announced this year by GE, Tata Steel and Bombardier. In December industrial production fell by 0.7% in Italy, 1.1% in Britain, 1.2% in Germany and 1.6% in France. In China both the official purchasing managers’ index (PMI) of...Continue reading
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