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U.S. Manufacturers Spending Forecast Highest in Six Years

January 27, 2012, 08:00 AM
Filed Under: Manufacturing

According to the findings of the Q4 2011 Manufacturing Barometer released by PwC US, U.S. industrial manufacturers expect continued domestic and international growth in 2012, although forecasts have fallen below 2011 actual growth rates. While uncertainty still prevails and own-company revenue expectations have moderated, optimism about the worldwide economy rose in the fourth quarter of 2011, including a notable improvement in sentiment regarding prospects for the U.S., as compared to an all-time low in domestic sentiment in the third quarter of 2011.
In addition, U.S. industrial manufacturers continue to forecast increased investment spending in the year ahead, including major outlays in operational spending.  Plans for merger and acquisition (M&A) activity also increased, and there was significant emphasis on expansion into new markets.

Investment spending plans continue to rise – forecast is highest level in six years.

Over the next 12 months, 67% of industrial manufacturing panelists plan major new capital investments, up 12 points from the third quarter of 2011.  The level represents the highest in the past five quarters, with two-out-of-three U.S. industrial manufacturers planning spending.  However, the average level of new investment spending is expected to be lower at 4.2% of sales, in comparison to 5.9% in the third quarter of 2011.  90% of respondents plan to increase operational spending, an increase of 5 points from the previous quarter.   Increased operational spending is cited for new product or service introductions (57%), information technology (50%) and business acquisitions (40%). 

To view the complete Manufacturing Barometer report, visit

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