PwC: Manufacturers are less optimistic

By Rob Starr, Content Manager, Big4.com

Manufacturers’ optimism about the Canadian economy dipped 22 points from last quarter’s high of 76%. With the Canadian economy dependent on exports and the current uncertainty in export markets (Asia, Europe and the United States), confidence levels amongst industrial manufacturers have lowered. This according to the PwC Manufacturing Barometer report for Q2 2012.

Sixty-three per cent of barometer respondents also said they need to increase investment in their operations and the leading area of operational interest is Information Technology (IT) with 40% of surveyors highlighting this area as a priority.

Looking ahead, the percentage of Canadian manufacturers’ who plan to expand to new markets abroad and establish new strategic alliances and joint ventures all increased this quarter. Of the Canadian manufacturers selling abroad, more than half of the respondents anticipate international sales to contribute to their total revenue over the next 12 months.

Calum Semple, industrial manufacturing leader, PwC comments:

“Sustained interest in international markets is a contributing factor to the confidence manufacturers have with their revenue forecast for next year,” he says.” While a majority of North American deals were made locally, the five outbound deals were larger in terms of value, according to the second quarter M&A report on the global industrial manufacturing industry, Assembling value.”

PwC’s Canadian Manufacturing Barometer is a quarterly telephone survey conducted by the independent research firm BSI Global Research Inc. It provides a 12-month outlook for revenue growth, M&A, new investments, hiring plans and emerging business trends.