BAD NEWS FOR CATEPILLAR, BAD NEWS FOR GLOBAL ECONOMY

The slump in the global extraction and construction industry is taking its toll on Caterpillar as the company is one of the world's biggest manufacturers of  heavy equipment to these industries.The spill over effect is beginning to show as declines are  being driven by weakness in the energy and mining businesses world wide and slowed growth in emerging markets like Russia and Brazil.
CAT, a giant investor in emerging economies announced today that it will cut more than 10,000 jobs through 2018, just as it lowered expectations for  revenue growth in 2015 and 2016.

This news however, is an indicator of what to expect from emerging economies and does not bode well for capital  investment in emerging economies.The key to spotting recessions is looking at overall global investment. As investment rises, so will profits and growth. When investments are falling, a recession isn’t that far around the corner. The growth in global capital investment has been coming from the emerging economic world, and not developed economies.