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Caterpillar says Brexit could affect its business in short-term

By John Mulgrew

Published 27/07/2016

Caterpillar NI boss: Robert Kennedy
Caterpillar NI boss: Robert Kennedy

Equipment giant Caterpillar - which employs 1,800 people in Northern Ireland - says uncertainty after the Brexit vote could have a short-term hit on customer purchasing decisions.

And looking forward into the second half of 2016, it says "global uncertainty continues and the recent Brexit outcome and the turmoil in Turkey add to risks".

It comes as the US-owned firm, which owns Caterpillar NI - formerly FG Wilson - reported a lower profit during the second quarter of 2016, as sales of new machinery remained sluggish.

But it says a weak pound could mean a boost to its exports from the UK.

Profits were down to $0.93 a share, revised down $1.31 a share a year earlier.

Asked about what impact Brexit could have on the business, the company said while there is "little economic data available that reflects activity since the referendum was held" in the "short-term the uncertainty could impact our customers' purchasing decisions".

"We have a substantial manufacturing presence in the UK and a weaker British pound would be positive for our exports from the UK," the company said.

"However, it is still too early to draw any definitive conclusions about what impact, if any, the Brexit vote will have on our business and on long-term economic growth in Europe."

Shortly before the EU referendum on June 23, Caterpillar NI - which is led in Northern Ireland by Robert Kennedy - told its 1,800 staff here that the business and the whole of the UK would be better off remaining part of the EU.

It said that it had told employees "it believes the UK's continued membership of a reformed and competitive EU is fundamental to the economic growth and wellbeing of both the UK and EU economy and best serves Caterpillar's business interests".

Total sales and revenues were $10.34bn in the second quarter of 2016, a decline of $1.98bn, or 16%, on the same period a year earlier.

Belfast Telegraph

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