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Survey: Manufacturers Expect Difficult Year Ahead

Two-thirds of U.S.-based industrial manufacturers are pessimistic about the U.S. economy over the next year, according to a survey conducted by PricewaterhouseCoopers (PwC). The firm's Manufacturing Barometer for the third quarter of 2008 finds that 90 percent of survey respondents believe the U.S. economy declined in the third quarter and 80 percent believe the global economy declined. Manufacturers are scaling back growth projections for their own company revenues, forecasting an average 2.8 percent over 12 months, a 24 percent decline from the projections last quarter, with lack of demand and decreasing profitability cited as the major impediments to growth. Plans for major new investments have curtailed, with only 34 percent of manufacturers earmarking capital for new expenditures during the next 12 months; 64 percent are planning operational spending increases, most on new product/service introductions and business acquisitions. "Anxiety over faltering credit markets has spread the world over, as economic concerns extend beyond the U.S. and impact global economies," says Barry Misthal, partner and industrial manufacturing leader at PwC. "Executives are more cautious than ever before and look towards the future with newfound fears and trepidation in the global economy." For the Manufacturing Barometer, PwC interviewed 50 senior executives at large multinational U.S. industrial manufacturing companies between August and October.

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