PwC: US Industrial Manufacturers remain largely optimistic

By Rob Starr, Content Manager, Big4.com

According to the Q2 2012 Manufacturing Barometer released recently by PwC US, the majority of US industrial manufacturers who were surveyed remain optimistic regarding prospects for the US economy, but sentiment about the global economic outlook continues to weaken.   Although optimism towards the US economy dropped from 70 percent in the first quarter of 2012 to 52 percent in the second quarter, US industrial manufacturers remain largely positive, recording only seven percent being pessimistic and 41 percent uncertain.  In contrast, only 13 percent of those selling abroad are optimistic about the world economy, a decline of 31 points from the first quarter.  In addition, 20 percent are pessimistic and 67 percent are uncertain about worldwide business prospects.

Gross margins constricted considerably in the second quarter of 2012, as only 27 percent of respondents reported higher gross margins, off 18 points from the first quarter.  Cost pressures declined during the second quarter with 30 percent of respondents noting that costs rose, down 20 points from 50 percent during the first quarter.

PwC’s Q2 Manufacturing Barometer highlights that 40 percent of US industrial manufacturers plan for merger and acquisition (M&A) activity during the next 12 months, and new strategic alliances increased seven points from last quarter to 42 percent in the second quarter of 2012.  Expansion to new markets abroad also rose slightly to 37 percent from 35 percent in the first quarter, and new joint ventures rose five points from last quarter to 33 percent in the second quarter.