Question

Discuss the relationship of economic conditions to industry sales for the company caterpillar for fy-19

Answer 1

Points to note :

1. The Construction Industries' had a total sales of $5.020 billion in the fourth quarter of 2019 which was a decrease of $685 million, or 12% as in comparison to $5.705 billion in the fourth quarter of 2018. The decrease occured due to decrease in sales mostly by the impact from changes in dealer inventories. Dealers decreased inventories during the fourth quarter of 2019, compared with dealer inventories that were almost zero during the fourth quarter of 2018.

2. In North America, sales decreased due to lower demand driven by the impact from changes in dealer inventories, while end-user demand was about flat. Dealers decreased inventories during the fourth quarter of 2019, compared with an increase during the fourth quarter of 2018.

3. Sales were higher in Latin America. While construction activities remained at low levels, the increase was driven by road and residential construction activities.

4. In EAME, the sales decrease was primarily due to the impact from changes in dealer inventories and lower end-user demand across most of the region. Dealers decreased inventories more during the fourth quarter of 2019 than during the fourth quarter of 2018.

5. Sales in Asia/Pacific were about flat as unfavorable price realization was mostly offset by a few countries' higher sales volume.