Area Development
In the midst of often gloomy predictions for 2011, PricewaterhouseCoopers LLP (PwC) shared some excellent news on the economy in its latest PwC US Manufacturing Barometer survey.Released July 28, it reveals that a vast majority of U.S. industrial manufacturers expect positive company revenue growth for 2011, as well as in the next 12 months. The bottom line: Positive international sales and prospects are expected to offset continued worries about the state of U.S. and global economies, while the greatest concerns remain higher oil and energy prices.

PwC's Manufacturing Barometer is a quarterly survey based on interviews with 60 senior executives of large, multinational U.S. industrial manufacturing companies about their current business performance, the state of the economy, and their expectations for growth over the next year. This survey summarizes the results for Q2 2011, and was conducted between April 7 and July 14, 2011.

Barry Misthal, U.S. industrial manufacturing leader for PwC, said U.S.-based industrial manufacturers in the second quarter of 2011 reported "positive expectations for their company revenue, international sales and gross margins, as well as plans for greater spending." While "several headwinds" are expected to grow in the next year, U.S. industrial manufacturers aren't as concerned about demand as in past quarters, he noted . "They are planning major new investments to introduce new products and services, expand their geographic reach, and undertake business acquisitions to bolster growth."

Nearly every respondent noted that international sales were up or the same compared to three months ago. That reinforced PcW's view "that with the right strategies, plans and understanding of the various risks involved in doing business overseas, industrial manufacturers can find robust opportunities to drive revenues in today's global marketplace," added Misthal. Mergers and acquisitions are expected to "fuel" that growth.

Looking ahead at the next 12 months, here are some of the predictions made by U.S.-based industrial manufacturers on key issues (see the full report for details):

The composite average growth estimate for own-company revenue growth in the calendar year rose to 6.3 percent in the second quarter of 2011 from 5.3 percent in the previous quarter, the fifth consecutive quarterly increase and nearly four times higher than the second quarter of 2010.

Eighty-eight percent of respondents forecasted positive own-company revenue growth for 2011, an increase of 4 points over the first quarter of 2011 and 23 points over the second quarter of 2010. Of those, 33 percent are forecasting double-digit growth for 2011, which is flat compared to the prior quarter, while 55 percent are forecasting single-digit growth, up 4 points over the prior quarter and 20 points higher than the same time a year ago. Only 8 percent forecast negative growth in the second quarter of 2011, versus 13 percent in the first quarter of 2011 and 20 percent in the second quarter of 2010.