Caterpillar Inc, the US manufacturer of construction and mining equipment, as well as diesel engines, natural-gas engines and industrial-gas turbines, says that it is coming out a four-year slump, “thanks in part to China”.

The Illinois-based company said that it is raising its expectations for sales this year, based on an improving outlook in China and improving demand in energy and transportation.

A spokesman said: “China’s economy has accelerated for two straight quarters, brightening sales prospects”, adding that on 25 April the company had increased its revenue forecasts to between $38 billion and $41 billion.

Matt Arnold, an analyst at investment group Edward Jones & Co, said: “Most people have seen enough evidence that the environment is turning from brutal to positive again. Between Caterpillar’s machinery numbers and other indicators and metrics, the industrial economy globally looks like it’s getting better, and Caterpillar is going to harness that.”

Caterpillar said in a statement: “Sales in Asia-Pacific were higher as a result of an increase in end-user demand, primarily in China, stemming from increased government support for infrastructure and strong residential investment.

“This increase was partially offset by an unfavourable impact from changes in dealer inventories, primarily in China, which were about flat in the first quarter of 2016 and decreased in the first quarter of 2017.”

CEO Jim Umpleby said in the statement: “There are encouraging signs, with promising quoting activity in many of the markets we serve, and retail sales to users turning positive for machines, energy and transportation for the first time in several years.”