Greater Optimism

Manufacturing Engineering, Mar 2007

A report from PricewaterhouseCooper in their Q4 Manufacturing Barometer reveals that economic optimism has rebounded among industrial manufacturers compared to last quarter: 64% of executives are optimistic about the US economy over the next 12 months compared to just 45% last quarter.

Despite this optimism, slower growth is expected as growth projections for the next 12 months dropped from 7.3% in the prior quarter to 6.2%. This is the lowest projected growth reported since Q1 2004.

Planned major new investments as a percent of revenue over the next 12 months remained steady at 6.5%, in line with the prior quarter's 6.6%. However, this is down significantly from the year-earlier level of 9.8%.

Hiring plans showed a continued downturn in those planning to add new workers. A year ago, 61% expected to increase their workforce over the coming year. This past quarter, only 33% plan to do so. Those planning to decrease their workforce have risen slightly to 12% from 7% over that same time period.

Concern about demand remained a negative factor, although it fell off to 39% from 48% in the prior quarter.