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U.S. Manufacturers Forecast Growth Despite Concerns

Written by: Steve Melito, Industry Blog Writer for FuzeHub

How Much Will Manufacturing Revenue Grow?
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U.S. manufacturers are more optimistic about their own revenue growth than about overall prospects for the U.S. and global economies. According to the Q3 2014 Manufacturing Barometer from PwC US, American industrial manufacturers forecast an average growth rate of 5.6% over the next 12 months. That’s nearly a half-percentage point jump from a year ago (5.2%), and a solid 1.6% increase from 2013.
At the same time, optimism about the U.S. economy fell from 65% in Q2 to 57% in Q3. Although more than half of the survey’s respondents still felt positive about the American economy’s prospects for the next 12 months, that 57% represents the lowest level of confidence in the past six quarters. Growing concerns about legislative and regulatory pressures, lack of demand, and tax policy drove the Q2-to-Q3 decline.
Meanwhile, optimism about the world economy also fell between Q2 and Q3. The 8% drop from 38% to 30% marks U.S. manufacturers’ lowest level of confidence in the global economy during the last eight quarters. According to Bobby Bono of PwC US, “an elevation of geopolitical concerns around the world” is adding “complexity” to manufacturers’ decision-making about cash outlays.
Although most U.S. manufacturers (57%) remain optimistic about their own revenue growth, a significantly smaller percentage (36%) plan to increase capital investments over the 12 months. That 36% also marks a large drop from Q2, when a majority of survey respondents (52%) indicated plans to boost capital outlays. Nevertheless, mean investment as a percentage of sales stayed the same at 5.7%.
To what extent does revenue growth determine your company’s plans for capital investment? If growth exceeds expectations, do domestic and international concerns become less important?
Read original story: U.S. Industrial Manufacturers Forecast Solid Growth
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