(Reuters) -Caterpillar ( CAT ) on Wednesday posted a drop in first-quarter profit, hurt by weak demand for its construction equipment due to economic uncertainty and said annual sales would be slightly lower from a year ago if it accounts for tariff impact.

The company, which is a bellwether for the global economy, provided two forecast scenarios for its annual outlook, of which one included the fallout of tariffs on its sales and revenue.

The industrial giant had benefited from former President Joe Biden's 2021 infrastructure law, a $1 trillion spending package that boosted demand for construction equipment.

But that momentum has started to slow as project starts ease and private sector investment shows some hesitancy amid higher interest rates.

High borrowing costs and persistent inflation have also pressured dealers to realign their inventory levels to match demand.

Quarterly adjusted profit per share fell to $4.25, compared with $5.60 a year ago. Caterpillar's ( CAT ) sales and revenue for the quarter through March fell to $14.2 billion from $15.8 billion, a year earlier.

(Reporting by Nathan Gomes in Bengaluru; Editing by Arun Koyyur)