Caterpillar CFO: U.S. economy not far from liftoff

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Edward Rapp

Updated: June 22, 2011 7:06PM

Caterpillar Inc. believes the American economy isn’t far from taking off again but needs a better idea of where government policy is headed in key areas such as taxes, Chief Financial Officer Edward Rapp said Thursday.

The company forecasts that the U.S. economy will grow by about 3 percent in 2012, Rapp said before a speech at Illinois Wesleyan University in Bloomington. He said growth of 3.5 percent to 4 percent should kick off demand for new heavy machinery like the company’s construction equipment.

“There’s a pent-up demand waiting to happen, but it’s going to take more robust growth in the U.S. to make that happen,” Rapp said.

But Rapp added that the business community needs to hear more about the government’s plan for taxes, trade and key drivers like highway construction.

Rapp added that while not many other companies in Illinois are publicly joining Peoria-based Caterpillar in its drive to push the state to lower worker’s compensation costs and other factors that make it more expensive to do business in the state, he believes the state’s businesses recognize the need for changers in Illinois and the country.

Caterpillar CEO Douglas Oberhelman earlier this year complained to Gov. Pat Quinn about the cost of doing business in Illinois and said the company is regularly courted by other states. Oberhelman later said Caterpillar has no plans to move.

Earlier Thursday, Caterpillar said its April sales were up 66 percent over a year earlier. Overseas sales that drove that growth are a product of continuing urbanization in developing countries, Rapp said.

Sales of its construction and mining equipment remained strong in April when global sales soared 66 percent over last year.

Latin America continued to be the strongest region with equipment sales growing 72 percent over last year. The smallest increase came in the region of Europe, Africa and the Middle East, but equipment sales there were still up 64 percent.

Caterpillar’s sales figures are considered an indicator of the health of the economy, so they are watched closely.

Engine sales were also up for Caterpillar in April but not as much as machinery sales. Caterpillar says total engine sales grew 25 percent.