The economy is not looking pretty in the eyes of U.S.-based industrial manufacturers. Optimism about the domestic economic environment from this group dropped dramatically in the most recent quarterly business climate survey conducted by PriceWaterhouseCoopers. Just 12% of senior executives surveyed said they were optimistic about the U.S. economy's prospects over the next year, compared with 29% who expressed optimism in the previous quarter and 57% who said they were optimistic in the first quarter of 2007.
That said, 70% of respondents to the Manufacturing Barometer survey reported they expect positive revenue growth over the next year. That's down 11 points from last quarter.
Oil and energy prices were identified by 68% of survey respondents as potential barriers to growth over the next 12 months. Additional sources of anxiety cited were lack of demand (62%), the monetary exchange rate (57%) and decreasing profitability (48%).
On the plus side, 63% of industrial manufacturers selling abroad saw their sales increase. International sales projections remained steady at 35% of total revenue.
"To weather this economic storm, industrial manufacturers must set their sights on growth opportunities abroad, while at the same time maintain the health of their domestic operations by controlling costs and making selective investments of capital," says Barry Misthal, PricewaterhouseCoopers industrial manufacturing sector leader.