As optimism in the U.S. and world economies continue to remain strong, senior executives of large consumer products companies raised their own companies’ revenue growth targets over the next 12 months to an average of 6.3%, up from a reported 4.8% in the first quarter of this year, and on par with projections a year ago (6.2%) according to PricewaterhouseCoopers’ (New York) Retail & Consumer Industry Practice’s Consumer Products Barometer.
Primary concern about oil/energy prices dropped sharply this quarter (down 19 points to 51%), along with anxiety about market demand (down 13 points to 17% from Q1). Nearly three-quarters (72%) of executives are considering other business initiatives over the next 12 months, led by M&A activity (51%), an increase of 15 points, making it nearly on par with the consensus. In fact, prospective M&A activity is higher among the oil/energy barrier segment – 63% versus 39%. The major focus of M&A activity reported in this segment is the purchase of another business (63%).
“We saw an interesting up-tick this quarter in revenue growth projections, specifically among those consumer products companies concerned about oil/energy prices,” said John Maxwell, leader of PricewaterhouseCoopers’ Retail & Consumer Industry Practice. “We believe these companies have passed along costs by raising prices. As a result, revenue growth projections shot up this quarter, which also attributes to the increase in global economic optimism and anticipated M&A activity within the industry.”
PricewaterhouseCoopers’ “Consumer Products Barometer” is a quarterly survey of top executives in 53 large, Consumer Products businesses (surveys conducted between May 5th and August 6th, 2007) compared with the 130 large, multinational company consensus.
PricewaterhouseCoopers’ “Consumer Products Barometer” is developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc. For more information about Barometer surveys, including recent economic trend data and topical issues, please visit: www.barometersurveys.com.
