Caterpillar Inc, the Illinois-based manufacturer of tractors and excavators, said today the global economy is slowing faster than it had expected and slashed its 2012 forecast for the second time this year, Reuters reported.

The company’s retail dealers are selling off inventories rather than buying new machines, forcing Caterpillar to idle some production, executives said.

“As we’ve moved through the year, we’ve seen continued economic weakening and uncertainty,” CEO Doug Oberhelman said in a statement.

The statement came despite better-than-expected third-quarter profit on a rebound in U.S. sales of heavy equipment to repair crumbling infrastructure. Europe and parts of Latin America remained tough regions for Caterpillar. Read more.