Coming off a 22% increase in sales in 2021, Caterpillar saw “one of the best years in [the company’s] nearly 100-year history” in 2022, according to Chairman and CEO, Jim Umpleby.
Full-year sales and revenues in 2022 were $59.4 billion, up from $51 billion in 2021. The 17% sales and revenue growth delivered for the full-year 2022 was driven by favorable price realization and higher sales volume.
The greatest impact came from changes in dealer inventories, increased services and higher sales of equipment to end users, Cat says. While dealer inventories were flat in 2021, dealers increased their inventories $2.4 billion in 2022. Within the Construction Industries segment, Cat noted that dealer inventories are now in their typical historical range of three to four months of projected sales.
In Q4, Cat’s sales increased by 20% to $16.6 billion, up from $13.8 billion in Q4 2021. Total construction sales for the quarter increased 19% to $6.8 billion.
Cat says North American sales increased by 34% thanks to increased dealer inventories and strong demand for both nonresidential and residential construction despite some moderation in residential. Nonresidential represents about 75% of Caterpillar’s Construction Industries sales.
The company also saw double-digit increases for the quarter in Latin America and Europe, Africa and the Middle East, while sales declined 10% in the Asia Pacific region.
“Supply chain improvements enabled stronger-than-expected shipments, particularly in Construction Industries, and supported an increase in dealer inventories. We achieved double-digit topline increases in each of our three primary segments and saw sales growth in North America, Latin America and EAME, while Asia Pacific was about flat,” Umpleby told investors during the January 31 earnings call.
2023 Construction Market Outlook
Looking ahead, Umpleby shared his construction market outlook for 2023 by region:
- North America: Positive momentum in 2023. Expect nonresidential construction in North America to grow due to the positive impact of government-related infrastructure investments, healthy backlogs and rental replenishment. Although residential construction continues to moderate due to tightening financial conditions, it remains at a healthy level.
- Asia Pacific (excluding China): Growth expected due to public infrastructure spending and supportive commodity prices.
- China: Weakness continues in China in the excavator industry above 10 tons. Expect it to remain below 2022 levels due to low construction activity.
- EAME: Business activity is expected to be about flat versus last year based on healthy backlogs and strong construction demand in the Middle East, offset by uncertain economic conditions in Europe.
- Latin America: Construction activity flat to slightly down versus the strong 2022 performance.