Caterpillar Inc. headed for a one-month low on concern that slowing economies and flagging demand from builders and other customers will weigh on earnings at the bellwether industrial company.

Analysts at William Blair & Co. cut their 2019 and 2020 estimates for Caterpillar, citing a “plummeting” North American construction-equipment market, cyclical peaks in end markets and the trade war. Meanwhile, Keybanc Capital Markets said there’s now a higher risk of industrial companies’ third-quarter results missing expectations, driven by uncertainty around global trade and further deterioration of broader macro data.

The outlook reflects growing economic gloom as a slowdown in manufacturing and simmering trade tensions undercut growth prospects. Morgan Stanley said a survey of U.S. construction-equipment dealers showed a jump in the number reporting elevated inventory levels, as well as those expecting a collapse in pricing.

“As a bellwether, the company typically sets the tone for the season, which is unlikely to be positive,” Larry De Maria, an analyst at William Blair, said in a note to clients. “Given new data that has come in and healthy skepticism to begin with, we reduced our estimates for the remainder of 2019 and for 2020 as the North American market weakened and further production cuts are probably necessary to align to retail demand.”

William Blair now expects 2019 earnings per share of US$11.25, which is below the US$11.76 a share average of 28 analysts’ estimate compiled by Bloomberg.

Caterpillar, which reports its third-quarter earnings on Oct. 23, dropped 1.7 per cent to US$118.25 a share at 10:08 a.m. in New York. A close at that price would mark the lowest since Sept. 3.