Industrial Manufacturing Outlook

According to PriceWaterhouseCoopers:

"U.S. industrial manufacturers are gearing up for growth, projecting an average revenue increase of 8.1 percent for the next 12 months, according to PricewaterhouseCoopers’ most recent Manufacturing Barometer. Executives surveyed also expressed continued worries about energy prices, and 61 percent noted they were either already sourcing from low-cost countries or seriously considering doing so.

Industrial manufacturers’ predicted growth rate of 8.1 percent is higher than last quarter’s projection of 7.8 percent – and significantly above the 6.5 percent forecasted a year ago. On another positive note, only 13 percent of respondents cited decreasing profitability as a potential barrier to growth, down from 22 percent last quarter.

Pass-through price increases have provided an opportunity for these companies to test their pricing power and maintain gross margins. While costs have increased for over half (53 percent) of the companies, nearly as many have boosted their prices (45 percent). At the same time, 40 percent of those surveyed increased their gross margins. These strong margins are enabling the majority of manufacturers (60 percent) to make major new capital investments over the next year, with 57 percent planning increased investment in new products or services, and 49 and 47 percent, respectively, expecting to make added investments in information technology and research and development."

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