Industrial manufacturers optimistic
Sentiment regarding prospects for the U.S. economy in the year ahead increased among U.S. industrial manufacturers in the Q4 Manufacturing Barometer.
According to PwC’s survey, 48 percent of respondents expressed optimism about the 12-month outlook for the U.S. economy during the fourth quarter of 2012, up 11 points from the third quarter, while only seven percent were pessimistic.
Reflecting the increased level of optimism, 83 percent of respondents forecast revenue growth at their own companies for the next 12 months, and only three percent expect negative results. Along with greater optimism, indications regarding new hiring increased to 58 percent, up 21 points from the same quarter in 2011. In addition, the projected average growth rate for own-company revenue over the next 12 months increased to 5.2 percent in the fourth quarter of 2012 up from a forecast of 4.6 percent in the third quarter of 2012 and 4.4 percent in the fourth quarter of 2011. These numbers contrast with sentiment regarding the international markets, where optimism regarding the 12-month outlook remained low at 32 percent and uncertainty remained high at 53 percent.
“Overall sentiment among U.S. industrial manufacturers regarding the prospects for the domestic economy rose in the fourth quarter along with company growth projections, which trended higher as well,” said Bobby Bono, U.S. industrial manufacturing leader for PwC. “The improved sentiment regarding the domestic outlook contrasts with the continued high level of uncertainty concerning the international stage. This dichotomy appears to be playing out in the healthy indications for net new hiring and operational investment, which contrast with the pullback in plans for international expansion. Management teams are placing their bets on the U.S. economy as they seek avenues to strengthen their competitive positions and foster growth.”
According to the fourth quarter survey, among the 58 percent of respondents who intend to hire over the next 12 months, the most sought-after employees are expected to be professionals/technicians (58 percent), skilled laborers (35 percent) and production workers (43 percent). All of these categories increased over the third quarter and only seven percent of survey respondents plan to reduce the number of full-time equivalent employees.
With regard to investment spending, 47 percent of respondents plan major capital investments over the next 12 months, slightly below last quarter (49 percent) and well below a year ago (67 percent).
Plans for M&A activity over the next 12 months remained consistent with 35 percent of respondents, compared to 37 percent in the third quarter of 2012. Of that number, 32 percent are looking at purchasing another business, while 13 percent are considering a sale of part or all of their own business.
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INDUSTRIAL SUPPLY MAGAZINE
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