Caterpillar's Retail Statistics Reinforce Expected Weakness

The decline in oil prices has led to a 60% drop in rig counts, since a peak of 1,609 in October. As rig counts have fallen, demand for Caterpillar's construction equipment has also weakened. This is evident from the 14% decline in Caterpillar's Construction Industries retail sales for the 3-month rolling period ended May. The segment is also suffering from the week construction activity in Asia Pacific, Europe, Africa and the Middle East, which has discouraged dealers from stocking inventory. Si...