Titan International has called time on the slump in the farm machinery market, despite an accelerating decline in agricultural sales which drove the tyres group into a third-quarter loss.

The statement helped its shares up 9%, and added fuel to a rally in machinery stocks fostered by economic data which showed America rebounding from recession faster than analysts had predicted.

The tyremaker, which fits out tractors for main brands including John Deere and New Holland as well as building machinery, said that it was confident that it would fare better in 2010 than 2009.

Maurice Taylor, the Titan chairman and chief executive, said: "I believe that the third quarter was the bottom of the downtrend in the construction and farm markets.

"Inventory reduction is over and business will start to slowly grow during the next four quarters."

Sector fillip

The statement comes amid a mixed week for machinery trade, with Agco, the maker of Massey Ferguson tractors, on Tuesday forecasting that machinery demand from North American farmers would "continue to soften".

And shares across the sector jumped on Thursday after official data showed the US economy growing by 3.5% in the third quarter, quicker than the 3.2% the market had expected.

Companies with a crossover to construction, a sector particularly badly dented by the recession, were amongst the strongest gainers.

'Extended shutdowns'

Titan's agriculture sales slipped 41% to $105.4m during the July-to-September period, compared with a decline of 14% in the previous quarter.

"Lower sales resulted from reduced demand for the company's products, as many of Titan's major customers implemented extended shutdowns," the group said.

While the company implemented its own cuts, these could not prevent it from falling into a loss of $3.03m compared with earnings of $37.4m a year before.

Ian Zaffino, analyst at New York broker Oppenheimer & Co, said the delayed US corn and soybean harvests, and a hiatus at Deere & Co, might also be to blame.

"We believe this reflects the harvest that has been pushed into the fourth quarter,", he said.

"It also reflects customer destocking and limited orders from Deere, ahead of its model changeover."

He added: "Overall, a weak quarter, but not unexpected."

Titans shares ended 9.7% higher at $8.79 in New York.