Economy Gets Good Grades from Consumer Products Group

PricewaterhouseCoopers (New York) Retail & Consumer Industry Practice's latest Consumer Products Barometer found that 64% of U.S. consumer products companies are optimistic about the U.S. economy despite the fact that 53% are still concerned about energy prices. The Barometer also found that while 43% of companies experienced higher costs this quarter, only 30% increased their prices.

Despite the positive outlook of most survey respondents, hiring plans decreased, with only 28% of consumer products executives planning to add workers over the next 12 months. This brings the percentage of net new employees in the workforce to minus 1.4%.

"U.S. consumer products companies remain optimistic about the economy, although oil and energy prices continue to be a source of concern," said John Maxwell, leader of PricewaterhouseCoopers' Retail & Consumer Industry Practice. "Lack of demand is emerging as a new top concern, possibly influenced by the high energy prices of the past few months."

Seventy-two percent of executives surveyed believe the domestic economy is growing, with 83% expecting positive revenue growth over the next year. These numbers have decreased since last quarter, when 84% expressed a belief in domestic economic growth and 91% predicted positive revenue growth. This quarter, the average growth forecast fell to 5.7% from 6.2% in the second quarter.

Most executives reported steady gross margins; 49% said their margins stayed the same from the second to the third quarter. Margins increased for 28% and decreased for 23 percent. Many companies (30 percent) increased their prices, while 43% had higher costs.

Source: PricewaterhouseCoopers

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