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):

• 90 percent expect positive revenue growth for their own companies, up a point compared to the first quarter of this year and 17 points higher than the second quarter of 2010. Twenty-eight percent forecast double-digit growth while 62 percent forecast single-digit growth, compared to 33 percent who forecast double-digit growth and 56 percent forecasting single-digit growth in the first quarter of 2011.


• 48 percent expressed optimism about the U.S. economy, down 9 points from the first quarter of 2011, but 3 points higher than the same period in 2010. Uncertainty about the U.S. economy was cited by 45 percent of panelists, an increase of 7 points over the first quarter of 2011, while 7 percent remain pessimistic in the second quarter of 2011, an increase of 2 points from the prior quarter.


• 52 percent plan to add employees to their workforce; up slightly from the first quarter of 2011 and 5 points higher than the same period last year. The percentage of participants who are planning a net reduction stayed the same as the second quarter of 2010 at 7 percent but increased from 3 percent in the prior quarter. 38 percent of manufacturers who market abroad are optimistic about the prospects for the world economy in the next year; a decline of 6 points from the prior quarter but flat compared to the same period last year. The majority (55 percent) are uncertain, up slightly from 51 percent, while 7 percent are pessimistic about the global economic outlook.


• 52 percent are planning major new investments of capital, an increase of 3 points over last quarter and 19 points higher than the same period last year. The increase marks the sixth straight quarterly increase in spending projections.
  
  
• Operational spending is also expected to increase, with 88 percent planning an increase (up from 86 percent in the fourth quarter of 2010 and 80 percent in the second quarter of 2010).


• 73 percent expect to participate in new business initiatives, with 45 percent planning merger and acquisition (M&A) activity. This M&A activity response was the highest rate in four years and was ranked equally with planning to expand to new markets abroad, which increased from 33 percent in the prior quarter. Plans for new facilities abroad rose 13 points to 35 percent while plans for joint ventures (38 percent) also rose.

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.