This chart and the way Caterpillar are reading it, is a good example of why deflation is a tough thing to work with. Example: why buy a boatload (literally) of earthmoving/mining equipment if the stuff you're digging for is dropping in price?. If you expect the decline to continue, what do your NPV calculations on your capital investments (equipment) tell you? You have little incentive to invest now, better to hunker down and ride it out until more predictable and profitable days return.
Now extend the same thinking to cars, clothing, machine tools, presses, whatever you like.
And so a deflationary contraction begins. Dropping prices look good on the surface but if you build dirt moving equipment not so much.