Optimism in the domestic economy dropped dramatically among U.S.-based industrial manufacturers in the first quarter according to the PricewaterhouseCoopers LLP Manufacturing Barometer. Only 12 percent of senior executives surveyed are optimistic about the U.S. economy's prospects over the next year, a drop from the 29 percent who were optimistic last quarter and the 57 percent who were optimistic one year ago in Q1 2007. Three-quarters (75 percent) of industrial manufacturers reported that they believed the domestic economy was declining, while only five percent believed it was growing. This is in stark contrast to one year ago, when 69 percent of respondents believed the economy was growing. Looking ahead, over one-half of these executives (52 percent) are pessimistic about the U.S. economy over the next 12 months, as compared to only 5 percent a year ago. “We knew industrial manufacturers were feeling the pressures of the economic downturn; however, the reality of the situation really hit us when we saw this quarter’s findings,” said Barry Misthal, partner and industrial manufacturing sector leader at PricewaterhouseCoopers. “We expect confidence will remain low for much of 2008, but we are hopeful that the sector will begin to look up as 2009 approaches.” On a positive note, survey respondents indicated that international markets continue to offer opportunities for industrial manufacturers. Sales increased for nearly two-thirds (63 percent) of manufacturers selling abroad, and international sales projections remain steady at 35 percent of total revenue. Over one-fourth of all executives (27 percent) plan to expand in markets abroad over the next year and 25 percent plan to develop new overseas facilities. However, only 38 percent of executives are optimistic about the world economy, a 26-point drop from the previous quarter and a considerable 45-point drop from one year ago.