Construction and Mining Equipment Wholesalers NAICS 423810

Sep 15, 2025 - Tariffs hit Caterpillar, Deere

• Machinery manufacturers Caterpillar and Deere discussed the impact of tariffs and other economic headwinds during their recent earnings calls, according to Reuters. The firms are struggling to absorb costs related to shifting US trade policy amid weaker demand and high interest rates. Caterpillar noted that margins would be pinched as tariffs push up costs for imported components and materials. Caterpillar has estimated that tariffs could add $1.5 billion to its costs in 2025. Deere also warned of rising costs for steel and other inputs. Global economic uncertainty and high interest rates have also softened demand for some types of equipment as buyers tap the brakes on large capital outlays. Caterpillar said steadier demand for its engines, turbines, and locomotives used in the power generation and rail industries would help offset weaker market conditions in construction and mining. Wholesalers’ profits could suffer if higher prices aren’t passed on to equipment buyers.
• Construction firms that work on civil infrastructure projects are holding steady as they manage uncertainties, including waning backlog growth and weaker margins, according to FMI’s third-quarter Civil Infrastructure Construction Index (CICI) survey. The CICI reading for the third quarter was 50.8 compared to 52.2 in Q2 2025 – on a 100-point scale. Any CICI reading above 50 indicates that more civil infrastructure contractors see conditions as good than poor. While about 52% of firms surveyed said their work backlogs had risen in Q3 2025 compared to a year earlier, only 25% expected backlog growth in Q4. While civil infrastructure firms expect backlogs to ease, margins remain under pressure from competitive bidding and higher costs. FMI expects firms to focus on project selection and cost controls to improve margins, as higher work volumes are a less reliable profitability boost.

• The Dodge Momentum Index (DMI) increased 7.5% in August 2025 to 301.4 (2000=100), up from the downwardly revised July reading of 279.9. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending for nonresidential buildings by a full year. On a monthly basis, the commercial planning component improved by 8.7%, and institutional rose by 5.4%. For the commercial sector, growth in August was led by data centers, warehouses, hotels, service stations, and parking garages. Some institutional spending slowed, including education and healthcare, but remained in positive territory. Dodge’s associate director of forecasting, Sarah Martin, suggested that after several months of uncertainty, project owners and developers are beginning to move ahead, pricing in higher tariff-related costs.
• John Deere and Volvo Construction Equipment (Volvo CE) recently announced large-scale expansions of their US-based manufacturing footprints, according to Engineering News-Record. Deere & Co. will invest $20 billion over 10 years into its U.S. operations, including new and expanded facilities in Missouri, North Carolina, Tennessee, and Iowa. Volvo CE is allocating part of a $261-million global investment to enhance its Shippensburg, Pennsylvania, excavator and wheel loader manufacturing site with new assembly lines, automation, and employee training. Both companies said their expansion plans would improve logistics, bolster US manufacturing, reduce supply chain vulnerabilities, and improve responsiveness to regional markets.