US producers gloomy as slowdown spreads

CHICAGO - U.S. executives at manufacturing companies grew increasingly glum about their businesses and the outlook for global growth during the second quarter, according to a survey released on Tuesday by PricewaterhouseCoopers.

By (Reuters)

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Published: Tue 29 Jul 2008, 6:42 PM

Last updated: Sun 5 Apr 2015, 1:00 PM

Ninety-two percent of the senior executives who responded to PwC's quarterly questionnaire said they were pessimistic or uncertain about the U.S. economy's prospects over the next 12 months, up from 88 percent who said they were worried in the first quarter and 38 percent who expressed concern a year ago.

Put another way, only 8 percent of the executives told PwC they were optimistic about the U.S. outlook -- the lowest reading the firm has seen since it began its Manufacturing Barometer survey five years ago.

In the first quarter, 12 percent of the executives said they were optimistic; a year ago, 62 percent said they were upbeat.

The executives said a number of factors contributed to their pessimism, including high energy prices, declining profit margins and new pressure from workers for higher wages.

Some 77 percent of the executives said they believed the domestic economy was in a recession in the second quarter. A year ago, only 3 percent believed the domestic economy was contracting.

And the executives indicated the challenges they have faced at home have begun to spread overseas, where until now strong growth has helped them weather the downturn in their own backyard.

Of those whose companies sell abroad, 63 percent said they were either pessimistic or uncertain about the world economy, up from just 22 percent a year ago.

"International sales have been a bright spot for U.S. manufacturers," said Barry Misthal, the head of PwC's industrial manufacturing team. "But dropping levels of optimism in the world economy are not a good sign. A faltering global economy would prolong a return to the above-average growth rates these manufacturers have enjoyed during recent years."

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