Recently, major players in the construction world released their financial reports for the second quarter of 2025. Here’s the rundown.
Quick Facts
• Caterpillar/CAT saw an increase in revenue year over year of $34 million, with a total profit of $137 million.
• Deere saw a decrease of 9% in net sales and revenue year over year in Q2.
• Volvo group saw a decrease of 5%, though much of the loss came from a decline in their truck division. However, their construction equipment vehicle sales division saw a 2% increase.
• Doosan/Bobcat had a 4% decrease year over year, but an increase from Q1 by 8.5%
• The overall industry saw a decrease in economic confidence due to uncertain market conditions from fluctuating tariffs, labor shortages, and project decreases in residential markets.
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CAT Posts an Increase in Q2
Caterpillar/CAT released its financial report for the second quarter of 2025, showing an increase in net sales and revenue for the quarter. The company reported revenues of $899 million, representing an increase of $34 million over Q2 2024. In addition to an increase in revenues, CAT reports a $137 million profit, which is a step in the right direction from Q2 2024, which reported a $20 million loss.
Part of the drastic increase year over year can be attributed to the sale of an attachments plant in Kansas, which has since been purchased by Solar Turbines, a San Diego based company that manufactures gas turbines amongst other products. The sale of the plant facility in 2025 increased the company’s overall profits by lowering operation costs and allows them to place financial focus on other operations, such as facilities in Texas.
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John Deere Posts a Double-Digit Loss
Unlike CAT, John Deere posted a loss in net sales for Q2 of 18% year over year. In its quarterly earnings call, the company reported a downturn in net sales from $13.6 million to $11.2 million. Other revenues were unable to compensate for this loss, and the company posted 24% loss in net income. The biggest loss came from their Ag and turf division, which was significantly impacted by the major decreases in the U.S. and Canadian markets. The construction and forestry divisions posted similar losses, but cited additional market downturn in the global market, not just U.S. and Canada.
In the wake of the net sales downturn, Deere has committed back to streamlining operations, investing in value-creating investments—though it is not specified what that may be—and raising dividends and completing share repurchases to deploy excess cash to investors and increase Deere’s stock value. These strategies promise potential additional cash flow into the business in the coming quarters.
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Volvo Holds Steady Despite Uncertainty
In its Q2 earnings call Volvo posted a decrease from Q1 to Q2 2025. Between Q1 and Q2, the decrease in net sales for the Swedish company was a loss of 5%, with a 6% decrease in the sales of vehicles company-wide. However, much of this loss comes from Volvo’s truck sales, which fell 9% year over year. Construction equipment saw a 2% increase in vehicle sales over Q2 2024.
As we’ve reported before, Volvo has put initiative into expanding its production facilities in Korea, Sweden, and the U.S. in order to adapt to the shifting global market. In addition to these facility improvements, the company has acquired Swecon to improve distribution in the European market. The company also reported a slight increase in its investment portfolio, which helps offset the lower net sales.
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Doosan/Bobcat Plans Layoffs and Downtime
Like several of its competitors, Doosan/Bobcat posted a loss in Q2, though it was considerably less than Deere at 4% down in revenue. When compared year over year, net profits fell 24.3%. However, Doosan/Bobcat did post a boost of 11% in profits over Q1 2025.
In its earnings call documentation, the company cites the increased tariffs and increased promotions as the leading causes for the fall in profits year over year. To offset some costs, strategic downtime layoffs are being proposed for August into early September at all North American facilities, according to a United Steelworkers update. These temporary layoffs hope to curb operating costs in the slower fall season.
The State of the Industry
While some heavy machine companies are posting gains, most of the market is facing some financial downturn. Major factors include tariffs, market uncertainty, and a major labor shortage due to changes in immigration policy and an aging population. A shift in project availability away from residential projects to commercial data centers has also played a factor in the overall industry.
In the beginning of the year, the Trump administration put numerous tariffs into place on imported goods to the United States with the intent of increasing domestic production to boost the economy. Unfortunately, with the rapid changes to these tariff policies, the market has not had the time to adjust and compensate, leaving American manufacturers like Deere and Bobcat uncertain, while foreign companies like Volvo have shifted focus to increased distribution outside the U.S.
This type of market uncertainty has major ripple effects throughout the industry. Construction projects are long-term projects lasting multiple months if not years, and not knowing the cost of raw materials six months down the line means that jobs can’t be quoted accurately.
There has also been a major shift in the types of projects being greenlit. While residential projects are seeing a decline, data center projects are seeing an increase due to the rise of AI. These projects require a different set of skills and workers, and as such the decrease in the residential sector means that the amount of work is more limited. That being said, the increase in data center projects has made up some of the difference in the decline of other project types.
As far as the workforce goes, approximately 20% of the construction workforce is over the age of 55, and many of these tradesfolk are looking to retire. Many of the vacancies left by these retirees are skill positions in which experience is a major factor in job completion, and unfortunately, there isn’t a pool of younger workers ready to move into these senior positions.
The shift in immigration policy has also affected the construction workforce. With ICE raids happening on job sites, many immigrant workers are either being detained or not showing up to the job site in fear of being detained. This has greatly affected the number of workers available in the industry.
Overall, the construction industry is at a major turning point. Between the market uncertainty and overall shifts in policy, poor management from these industry giants will make or break the overall health of the construction industry. And while it is not time to panic, it is imperative that we keep an eye on the financial situation going forward.
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