Industrial manufacturing CEOs wary but still looking forward

This time last year 86% ofrespondents to the PricewaterhouseCoopers’ (PwC) Global CEOSurvey were confident or very confident about the prospects forincreasing their companies’ revenues. This year, 64%expressed the same level of optimism. Despite the current economiccrisis however, industrial manufacturing CEOs are positive about thelonger term with 93% being confident about the potential forrevenue growth over the next three years. The top three ratedopportunities for contributing to this growth are geographic expansion,penetration of existing markets and new product development.

“Lastyear CEOs gave these three opportunities equal weight however, thisyear new product development ranks much lower on the boardroomagenda” says Calum Semple, leader of PwC Canada’sIndustrial Manufacturing Practice. “Despite the downturn,industrial manufacturing CEOs are also still looking for suitabledeal-making opportunities.”

Thesurvey, which included the input from 109 global industrialmanufacturing CEOs showed that merger and acquisitions remain high onthe agenda with 35% of respondents intending to complete a deal overthe next 12 months. High on the agenda is also technical improvementwith 60% saying innovation is critical.

“Manycompanies have been forced to scale back their research and development(R&D) budgets meaning management will have to look for creativeways in which to support innovation such as collaborating with supplychain partners, customers and clients,” notes Semple.

Industrialmanufacturing CEOs feel their R&D could be more effective withaccess to better information and 83% say this is critical, 57% wouldlike more information and 13% currently feel the information theyreceive is inadequate.

Lack of naturalresources is one of the issues that most concerns industrialmanufacturing CEOs and the survey has revealed that 46% believe theworld’s dependence on carbon based energy will have anegative impact on their business with many already taking steps toalleviate the situation. 88% are seeking operational improvements toreduce energy consumption with 59% investing in energy efficienttechnologies and 51% turning to renewable sources of energy.

Talentand skills were high on the agenda in last year’s results;however, the downturn has helped to push the people factor lower downthis year with 47% concerned about a shortage of talent this yearcompared to 62% last year. This seems surprising given that 38% of CEOsanticipate increasing their headcount over the next 12 months and thatthey experience many of the same problems finding good people.