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Manufacturing Figures Show Promising Rise

PricewaterhouseCooper survey finds manufacturers more optimistic, while Institute for Supply Management measures take big jump in October. But full recovery may not come till late 2010.

By John McCloud | Updated on November 04, 2009

NEW YORK CITY-A new poll from PricewaterhouseCoopers revealing greater optimism among US manufacturers and a report from the Institute for Supply Management (ISM) showing October jumps in several of its manufacturing activity indexes suggest industrial property owners could soon start seeing a boost in leasing demand. The changes were bolstered by late October news from the Commerce Department reporting 1% increase in bookings for durable goods in September as well as the first rise in the nation’s GDP since Q2 2008.

The PricewaterhouseCoopers poll, which surveyed senior executives at 60 industrial manufacturers from mid-July to mid-October, found that 48% of US-based industrial manufacturers feel optimistic about the US economy over the next year, up from 43% in Q2. At the same time, only 23% of respondents expect their own businesses to regain strength before June, though another 45% expect to see business improve in the second half of next year. An additional 17% anticipate recovery the following year, while the remainder foresees no improvement for several years, if ever.

Significantly, the number of companies anticipating revenue growth over the coming year showed an even greater jump from Q2, with 57% answering positively in Q3 compared to only 43% three months earlier. On the other hand, 42% worry that profits might fall. Though 75% expressed some level of concern about a lack of demand, the figure was down from 82% in Q2. And while only 25% of respondents indicated they plan to add employees over the next 12 months, that figure also was up from the preceding quarter. In addition, 37% now plan to make major capital investments, compared with 27% in Q2.

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