U.S. Manufacturing Executives Optimistic About Next 12 Months

March 31, 2010

Hesitant to predict new hiring

Compared to their European counterparts, U.S. executives remain more bullish about their business prospects over the next 12 months, according to the latest KPMG Global Business Outlook survey by KPMG International.

The positive sentiment was strongest among manufacturing sector executives, whose optimism increased since they were surveyed in October 2009.

"Overall executives are telling us they are optimistic about the future, particularly in the United States, where the recovery appears to be taking hold more quickly than in Europe, as well as in the BRIC countries, which were generally less impacted by the downturn," said Mark A. Goodburn, Vice Chairman, KPMG LLP.

Despite an expected uptick in business activity, both manufacturers and service providers are somewhat hesitant to predict new hiring during the period, with the majority of respondents maintaining a neutral view on future hiring prospects.

Highlights from the KPMG Global Business Outlook Survey include:

Business Activity

U.S. -- 71% of the manufacturing executives said business activity would be higher in the coming 12 months, up from 65% in October; 5% said it would be lower, down from nearly 11% in the last survey.
Globally -- 61% expected improvement, up from 57% in October
EU -- 57% expected higher activity in the period, compared with 51% in October
BRIC -- 68% expected higher activity in the coming year, as opposed to 61% in October

Employment: Executives indicated a rising trend line, however slight, as 34% expected higher employment, as opposed to 32% in October; 55% thought it would remain unchanged, compared with 53% in the last survey; 6% said it would be lower, half of the 12% reported in October.

Business Revenue: 67% expect revenue to rise in the coming 12-month period, up from 62% in October; just 6% said revenues would be lower, down markedly from 12% in the last poll.

Profit: More than 63% of manufacturing executives expected higher profits in the coming 12 months, up from 60% in October; just 6% expected lower profits, down from 14% in the last survey.