Despite continued uncertainty about the prospects of both the U.S. and global economies, the majority of U.S. industrial manufacturers remain positive regarding their revenue outlook for the next 12 months, according to the Q3 2012 Manufacturing Barometer released today by PwC US, an accounting and consulting firm.  

Some 82% of respondents forecast revenue growth at their own companies for the next 12 months. Only 9% expect negative results, with many of the respondents planning to hire additional employees, as well as invest in new products and research and development.  However, the projected average growth rate for own-company revenue over the next 12 months dropped to 4.6% from 5.6% in the second quarter, and below last year’s 5% estimate.

“While the majority of U.S. industrial manufacturers continue to forecast revenue growth at their companies over the next 12 months, overall sentiment among those surveyed remains cautious toward the direction of both the U.S. and global economies,” said Bobby Bono, U.S. industrial manufacturing leader for PwC. “Margins remained flat during the third quarter and inventories rose, while concerns rose regarding a lack of demand as a barrier to growth. There was also a notable pullback in capital and operational spending plans for overseas expansion. These factors may point to the continued uncertain global climate and a more guarded approach being taken by industrial manufacturers.”

Optimism regarding the 12-month outlook for the U.S. economy dropped to 37% in the third quarter of 2012, down 15 points from 52% in the second quarter, but remained well above the record low levels during the same quarter of 2011.

Sentiment regarding the 12-month outlook for the world economy among manufacturers who market abroad remained low at 29%, although this level improved by 16 points from 13% in the second quarter.  Still, the majority of respondents (54%) expressed uncertainty regarding the 12-month outlook for both the U.S. and global economies.  

The top three barriers to growth in the next 12 months manufacturers identified in the survey were:

  • Lack of demand - 67% (up sharply from 48% in the previous quarter)
  • Legislative/regulatory pressure - 44%
  • Oil/energy prices - 33%

Despite the cautious outlook, more U.S. industrial manufacturing panelists are planning net new hiring over the next 12 months, at 47%, up five points from the previous quarter. Only 7% plan to reduce the number of full-time equivalent employees. The most sought-after employees are expected to be professionals/technicians (33%), production workers (25%) and skilled labor (21%).