Survey: U.S. Manufacturers Pessimistic About Economy
Tue, 04/29/2008 - 7:45am
NEW YORK -- Optimism in the domestic economy dropped dramatically among U.S.-based industrial manufacturers in the first quarter according to the PricewaterhouseCoopers LLP Manufacturing Barometer.
Only 12 percent of senior executives surveyed are optimistic about the U.S. economy's prospects over the next year, a drop from the 29 percent who were optimistic last quarter and the 57 percent who were optimistic one year ago in Q1 2007.
Three-quarters of industrial manufacturers reported that they believed the domestic economy was declining, while only five percent believed it was growing. This is in stark contrast to one year ago, when 69 percent of respondents believed the economy was growing. Looking ahead, over one-half of these executives are pessimistic about the U.S. economy over the next 12 months, as compared to only 5 percent a year ago.
“We knew industrial manufacturers were feeling the pressures of the economic downturn; however, the reality of the situation really hit us when we saw this quarter’s findings,” said Barry Misthal, partner and industrial manufacturing sector leader at PricewaterhouseCoopers. “We expect confidence will remain low for much of 2008, but we are hopeful that the sector will begin to look up as 2009 approaches.”
The Barometer found that fewer executives expect positive revenue growth over the next year, down 11 points from last quarter. Coinciding with increased concerns over the economic climate, revenue targets were reset to 4.6 percent, a 15 percent drop from the 5.4 percent recorded in Q4.
Two-thirds of executives cited oil/energy prices as a potential barrier to growth over the next 12 months.
Other key sources of anxiety cited include lack of demand , the monetary exchange rate, and decreasing profitability.
On a positive note, survey respondents indicated that international markets continue to offer opportunities for industrial manufacturers.
For access to the complete Manufacturing Barometer report, visit www.pwc.com/manufacturing