Second-quarter profit at Caterpillar, the world’s biggest maker of construction equipment and heavy-duty engines, fell by two-thirds from last year, but the results far exceeded Wall Street’s expectations and the company issued a more bullish profits outlook for the rest of the year.

The results contrast with Caterpillar’s quarterly earnings release in April, when the manufacturer reported its first quarterly loss in 17 years. The improved earnings and outlook will feed hopes that the global industrial economy may be recovering. Caterpillar is widely seen as a bellwether of the US economy, but it depends on markets outside North America for about 60 per cent of its sales.