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Industrial CEO Optimism Based on Cost Controls

Nearly four-fifths of industrial manufacturing CEOs are somewhat, or very, confident of revenue growth over the next 12 months, although just 18% believe the global economy will improve, according to PwC’s annual Global CEO Survey. This survey collected the opinions of more than 1,200 CEOs based in 60 different countries.

In fact, 40% of industrial manufacturing CEOs expect the global economy to decline in the next 12 months, although they are slightly more optimistic than their counterparts in the entire sample. To improve their own economic situations, 68% say they are focusing more heavily on innovations designed to reduce the cost of existing processes.

Competitive threats also loom for 64% of industrial manufacturing CEOs, compared to 56% of the total sample. That’s why most are keeping a tight rein on costs. 78% have implemented a cost-reduction initiative over the past 12 months, and 70% expect to trim the fat in the next 12 months.

Many industrial manufacturing companies are running much more efficient operations than they did just a few years ago. That’s partly due to innovation.
But industrial manufacturing CEOs are still being conservative when it comes to spending the cash that’s been saved: only 22% intend to make a major change to their capital investment decisions this year, compared to 36% last year. That doesn’t mean they are not ready to invest if the right opportunities arise, though: 35% are planning to complete a cross-border merger or acquisition in the next 12 months (compared to 28% of the overall sample).

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