According to Caterpillar Chairman and CEO Jim Owens, the U.S. economy is probably in a recession and is unlikely to start recovering until late this year. The American Economyis currently  dogged by mortgage foreclosures, a steep drop-off in residential construction and financial market turmoil triggered by the subprime loan crisis. As a direct result of this, Caterpillar and other construction equipment comapanies are looking to further estblish themselves in Asian and South American markets, where there is significantly more development undertakings in progress and planned for the future. Caterpillar is eager to expand in Asia, where it trails local competitors such as Komatsu, and as a slowdown in the U.S. economy dampens the outlook for construction equipment demand in its home market.
The North American market will adversely suffer from this de-emphasis as capital generated from such large construction projects will stagnate and negatively affect the economy. The housing crisis has been largely blamed for the recent downturn in the North American financial markets, in particular The Dow Jones and The Toronto Stock Exchange. Although the TSX has not felt the full impact of the housing crisis in the United States, analysts predict that the recession will spread throughout North America, due to the fact that the United States is Canada’s largest trading partner. The United States has a reduced capacity to now purchase material from Canada and must now also increase its prices due to infaltion in the American economy.
Related links: http://www.cnbc.com/id/23790891
