Caterpillar Inc. (CAT), the world's largest manufacturer of construction machinery by sales, said worldwide retail sales fell sharply in July.

World machinery sales declined 48% in the three-month period ended in July, compared with the same period a year earlier. World sales were down 47% for the three months ended in June and down 43% in May.

The company reported lower machinery sales across all its geographic markets. Three-month retail sales in North America were down 59% in July from a year ago. North American sales fell by the same rate for the June period and dropped by 57% in May.

In the rest of the world, excluding North America, three-month machinery sales were down 40% for the July period, compared with a decline of 38% in June and a 35% reduction in May.

The sales decline worsened in July from June in the Asia Pacific and Latin America markets, while improving slightly in the Europe, Africa and the Middle East market.

Total sales of engines were down 33% in the July period from a year ago. Falling sales were reported in all of the company's engine categories, except marine engines where sales rose 1% in the July period. Marine sales were up 15% in the June period.

Caterpillar's stock was recently trading up 0.53% at $45.41 a share

-By Bob Tita, Dow Jones Newswires; 312-750-4129;

robert.tita@dowjones.com