According to PricewaterhouseCoopers' (New York) Q4 Manufacturing Barometer, economic optimism has rebounded among industrial manufacturers compared with last quarter: 64% of executives are optimistic about the U.S. economy over the next 12 months compared to just 45% last quarter.
Despite this increase in 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. Optimism about the world economy also rose from 58% to 69%.
The Barometer provides a look at other industry and economic findings, such as respondents' views that energy prices remain the leading potential barrier to growth over the next 12 months, in addition to two new potential barriers, which are revealed in the fourth quarter survey findings—concern about legislative/regulatory pressures and taxation policies.
The manufacturing barometer, a quarterly survey, is based on interviews with 61 senior executives of large, U.S. industrial manufacturers about the business climate.
Planned major new investments as percentage 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.