Business NEWS
Caterpillar says will raise prices up to 2 percent in 2010
By Amarendra Bhushan for CEOWORLD Magazine Updated:October 5, 2009
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The world’s largest maker of construction and mining equipment, Caterpillar Inc (NYSE:CAT) (CAT.N) said it plans to raise prices on most of its machinery by up to 2 percent next year.
The company said in a regulatory filing the price hike was prompted by “current industry factors and current and expected general economic conditions.”
The price change will be effective in January and includes adjustments to list prices and merchandising support.
Caterpillar anticipates global economic growth of 2.2% growth in 2010, following a forecast decline of 2.2% in global gross domestic product in 2009. Demand for construction equipment has fallen sharply this year, prompting Caterpillar to lay off tens of thousands of workers and idle assembly plants to lower its fixed costs.
But material costs, particularly for steel, have remained stubbornly high compared with previous global economic downturns. By raising prices on machinery Caterpillar will be able to offset rising material costs without eroding profit.
Caterpillar shares were up 3 percent at $50.25 on the New York Stock Exchange in early trading.
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