In addition, 35% of respondents believe the U.S. economy grew in the fourth quarter of 2009. Only 15% report declines, while 50% say economic activity was flat. Industrial manufacturers’ average revenue for calendar year 2009 was a double-digit loss (-11%), with only 20% reporting positive growth. However, the majority (57%) forecast positive revenue growth in 2010. Nineteen percent expect double-digit growth, while 38% forecast single-digit growth. Only 13% forecast additional declines.
Nevertheless, 75% of respondents remain cautious due to lack of demand. Other concerns include taxation policies (53%), legislative/regulatory pressures (52%) and decreasing profitability (42%).
“We are beginning to see cautious optimism about the economy in the industrial manufacturing sector,” says Barry Misthal, U.S. industrial manufacturing leader for PricewaterhouseCoopers. “There is a sense that the worst is over, but recovery will be slow. These manufacturing executives are still facing a significant challenge to their growth targets from a lack of demand. The industry needs improved momentum in the overall business climate and a reduction in regulatory and legislative pressures."
Thirty percent plan to add employees in the next 12 months, and only 12% are planning more workforce reductions. Inventory is still down for 49% of manufacturers, meaning the anticipated inventory buildup did not begin in the fourth quarter of 2009. Thirty-five percent are planning major investments of capital over the next 12 months.
The Q4 2009 Manufacturing Barometer report summarizes the results of a survey conducted from Oct. 13, 2009, to Jan. 12, 2010.