PricewaterhouseCoopers' Manufacturing Barometer reported on July 25 that U.S. industrial manufacturers lowered their average revenue growth projections for the next 12 months from 6.8% (as reported in Q1 of 2007) to 5.7%, a 16% reduction. Additionally, executives are only expecting a 3% revenue growth rate for the industrial manufacturing sector as a whole in the 2007 calendar year.
While optimism in the global economy remains high (78%), more than half (53%) of manufacturing executives cite competition from foreign markets as one of the leading barriers to achieving revenue targets.
The leading threat to revenue growth is the oil/energy impact on increased costs (59%.). Competition from foreign markets follows closely at 53%, which is up significantly from last quarter where it came in at 39%. Monetary exchange rates and interest rates pose additional cause for concern among senior executives. Nearly one-third (30%) of the respondents cited exchange rates as a future barrier to growth, up from 21% last quarter, and 28% considered higher interest rates as another possible barrier to growth.
Yet, despite these threats, 62% of those surveyed are optimistic about the domestic economy, and 69% believe the U.S. economy grew during the second quarter. In fact, 90% of executives think the world economy expanded in the second quarter.