(Reuters) -Caterpillar ( CAT ) reported a decline in fourth-quarter profit on Thursday, as dealers scaled back equipment restocking due to weak demand, driven by high borrowing costs and persistent inflation.

Contractors are adopting a wait-and-see approach to purchasing new machinery against the backdrop of growing uncertainty over government spending under the Trump administration.

Meanwhile, the initial surge in demand powered by government projects under former President Joe Biden's 2021 infrastructure law, a $1 trillion push to upgrade roads and bridges, has also tapered off.

Concerns over high borrowing costs, the U.S. Federal Reserve's cautious pace of interest-rate cuts, and persistent inflation have compelled dealers to scale back inventory restocking to better align with demand trends.

Adjusted profit per share for the fourth-quarter fell to $5.14, compared with $5.23, a year ago.

Caterpillar's ( CAT ) sales and revenue for the quarter through December fell to $16.22 billion from $17.1 billion, a year earlier.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Arun Koyyur)