Caterpillar’s first-quarter sales and revenues suggest the global construction industry is experiencing a downturn in 2015 due to lower oil prices, political conflicts and concerns about growth in China and other emerging markets.

The sales performance of the US-based equipment manufacturer is one of the best gauges of global construction activity. Best known for its heavy construction and mining equipment, the company supplies machines to almost all global markets and as a result its sales volumes effectively track global construction activity.

For the first quarter of 2015, Caterpillar’s profits were up, but sales and revenues were $12.702bn, down about 4 per cent from first-quarter 2014 sales and revenues of $13.241bn. “Sales and revenues were off about 4 per cent from the first quarter of last year, mining remained weak and construction was down in most regions,” said Caterpillar chairman and CEO Doug Oberhelman.

The only market where sales and revenues grew was North America. Accounting for about half of the company’s sales, that growth offset declines in all other regions.

The company also cut its workforce. Full-time employment was 113,322 at the end of the first quarter of 2015, compared with 116,579 at the end of the first quarter of 2014, although there was an increase in its non-full-time workforce.

The company’s outlook for the world economy in 2015 is GDP growth of about 2.7 per cent, up from about 2.6 per cent in 2014. The improvement will come from developed countries, with economies in developing countries growing at a rate slightly below their growth rate in 2014.

Significant risks include political conflicts and social unrest that disrupt economic activity in several regions; in particular, the Commonwealth of Independent States, Africa and the Middle East.

The company also said that the Chinese government’s push for structural reforms is slowing growth, and the ongoing uncertainty around the direction and timing of US fiscal and monetary policy actions may temper business confidence.