(Reuters) -Heavy-equipment maker Caterpillar Inc posted a rise in third-quarter profit on Thursday as robust demand, low inventories and raised prices helped it mute the impact of higher material and freight costs.

“We continued to see healthy demand across most of our end markets during the third quarter,” Chief Executive Jim Umpleby said.

However, supply-chain challenges have clipped its ability to ship units, elevating costs, resulting in the industrial bellwether raising prices.

Demand for Caterpillar’s machines that are used in everything from housebuilding to mining is an indicator of business confidence and broader economic activity.

In the previous quarter, the company had flagged a bigger drop in demand for its excavators in its growth market, China.

Caterpillar’s revenue for the quarter through September rose to $15.0 billion from $12.4 billion a year ago. Adjusted profit rose to $3.95 per share from $2.66 per share a year earlier.

The company’s shares were up 2% before the bell.

(Reporting by Aishwarya Nair in Bengaluru; Editing by Arun Koyyur)

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