Global construction giant Caterpillar (CAT) reported Q1 revenue and earnings that fell from a year ago. Even worse, management cut its outlook for 2016 sales.

The company earned $0.67 per share, down from $2.07 in the prior year; it was also a bit lighter than the $0.68 expected by analysts. Revenue fell to $9.46 billion from $12.7 billion a year ago.

“Sales declined across the company with substantial reductions in construction, oil and gas, mining and rail,” CEO Doug Oberhelman said. “While many of the industries we serve are challenged, we remain focused on what we can control: the quality of our products, our market position, safety in our facilities and continued restructuring and cost reduction.”

Because Caterpillar has a presence in construction markets all over the world, many experts regard it as a bellwether of the economy.

Construction equipment manufacturers are particularly exposed to commodity producers, which have been getting slammed by low prices, and China, which has seen growth decelerate.

“We have seen recent increases in commodity prices, some signs of improvement in construction equipment in China and better order activity than we expected at bauma, the world’s leading trade fair for many of the industries we serve,” management said.

“While we are seeing a few positive signals, other parts of our business remain challenged.  As a result, we have lowered the midpoint of the outlook for 2016 sales and revenues about 2 percent.”

Shares are down 3% in pre-market trading.