News & Information

Survey finds industrial manufacturers optimistic about 2004

Continuing with results seen in the third quarter, U.S. manufacturers remain upbeat and optimistic about the U.S. economy over the next 12 months, according to the PricewaterhouseCoopers Manufacturing Barometer.

Despite this outlook, the manufacturing sector continues to trail the consensus on positive economic indicators.

The barometer, which compared the views of industrial manufacturing senior executives with a cross-section of all businesses, found the manufacturing responses were consistently lower. Looking ahead, 78 percent of industrial manufacturing executives are optimistic about the economy's prospects over the next 12 months. The consensus view is more upbeat with 85 percent optimistic.

Growth barriers are numerous. Sixty percent of industrial manufacturing executives cite competition from foreign markets as a potential barrier to growth over the next 12 months, well ahead of the consensus of 38 percent. A distant second in importance, 39 percent see lack of demand as a barrier, slightly higher than the consensus view of 34 percent.

Other concerns around which the industrial manufacturing sector leads the consensus: decreasing profitability, cited by 34 percent (consensus, 28 percent); capital constraints, 27 percent (consensus, 21 percent); and monetary exchange rate, 20 percent (consensus, 16 percent).

"The industrial manufacturing sector has shown improvements, quarter-to-quarter, and going forward it is nearly as upbeat about the economic climate as other large U.S.-based businesses," said Dean Simone, managing partner of PricewaterhouseCoopers' U.S. Industrial Products industry program. "But, manufacturers continue to have comparatively lower momentum, are more fearful of competition from abroad and must overcome many more obstacles in order to achieve solid growth in the year ahead."