NEW YORK (AP) -- Caterpillar Inc. said Friday its machine sales worldwide jumped 11 percent in May compared with a year ago as a rebound in North American and Asian business markets helped offset declines in European sales.
It was the first time since August 2006 the company has reported year-over-year growth in North America machine sales, said Jefferies & Co. analyst Stephen Volkmann.
"While this is in line with our view that the industrial economy is recovering, it is also somewhat stronger than even we had expected," he added.
Caterpillar is the world's largest maker of construction and mining equipment. Because its iconic yellow-and-black equipment is used in many different sectors all over the world, the company's sales are considered an indicator of global economic health.
In a filing with the Securities and Exchange Commission Thursday, the Peoria, Ill., company said May sales were up 15 percent in North America and surged 38 percent in the Asia Pacific region, but fell in Europe, Africa and the Middle East.
Economists expect manufacturing to keep growing in North America and Asia for the rest of the year, but they don't think it will be as strong as in the first six months of 2010. Also, there are concerns that if Europe's debt crisis worsens, is could depress economic activity further in a key U.S. export market.
Caterpillar said sales in the Europe, Africa and Middle East region fell 8 percent in May, and dipped 2 percent in Latin America. Sales in Europe fell less in May though than they did in April, which Volkmann said shows that debt issues there aren't yet affecting trade.
Caterpillar said global retail sales of reciprocating and turbine engines in the company's industrial segment jumped 17 percent, while those in the electric power unit rose 4 percent. Total engine sales fell 10 percent, better than the 21 percent drop seen in April and the 30 percent year-over-year decline seen in March.
Overall, Volkmann said the results underscore that a global recovery is underway. He expects Caterpillar to exceed expectations in the coming months.
But some weakness is still evident. Caterpillar's sales of boat and ship engines were down the most of any category, at 27 percent. While that was better than the 35 percent drop seen in April, it exceeded the 22 percent decline booked in March.
Caterpillar shares rose 65 cents in midday trading to $65.60.