April 29, 2009 / 5:12 PM / 11 years ago

UPDATE 1-Caterpillar CEO sees 2nd U.S. infrastructure stimulus

* Says Chinese excavator sales back to pre-crisis levels

* Predicts 2nd round of U.S. infrastructure spending (Recasts, adds additional Owens comments, background, byline)

By James B. Kelleher

CHICAGO, April 29 (Reuters) - The top executive at construction equipment maker Caterpillar Inc (CAT.N) said on Wednesday he believes there will be another round of U.S. stimulus spending on infrastructure because the first was not big enough to offset the decline in private-sector building activity.

“I’ll be surprised if we don’t decide we need to come back and maybe invest more,” Jim Owens, Caterpillar’s chief executive and chairman, said at an event in Chicago.

Owens, a member of President Barack Obama’s economic recovery advisory board, called the U.S. construction industry a “very recession-stricken sector” with plenty of capacity that could be put to work quickly. He said the benefits of a second round of public works building would extend well beyond the construction trades to the quarry and aggregate, cement and steel businesses.

Owens said he was reaching out to experts and officials around the country for a list of worthy but unfunded road, hydroelectric dam, rail and airport building projects that he’d bring to the advisory board as part of the discussion process.

“Now would be a very meritorious time to pull those investments forward and try to stimulate economic growth,” he said.

Owens said he shared some of his ideas with Secretary of Transportation Ray LaHood to “get him thinking about it” but admitted: “Whether he’s on the same page as we (are) — I don’t know.”

The $787 billion economic stimulus plan that President Barack Obama signed into law in February contained about $70 billion in infrastructure spending that could be disbursed in 2009 — about 6.5 percent of last year’s total construction spend in the United States.

The Chinese have been much more aggressive. Although their stimulus package is smaller, a much larger chunk of it is going to public works building. As a result, Owens said sales of hydraulic excavators in China rebounded to near-record levels in April after falling to near-zero last fall.

Owens, a critic of protectionism, said he was not worried that some policy responses to the H1N1 flu outbreak — like border and travel restrictions and food import bans — might trigger a trade spat at a time when the global economy could least afford it.

“You’re always worried about these kinds of things shutting down people flow, trade flow, and it’s another apprehension,” he said.

But most of the actions taken so far, he said, seem reasonable given the uncertainty surrounding the virus and the possibility the outbreak could morph into a pandemic. But Owens called the timing of the outbreak and the restrictive policy steps taken in response “not good.” (Reporting by James Kelleher; Editing Bernard Orr)

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