To add or not to add? Jobs, that is.

This seems to be the potential dilemma for American industrial manufacturers, according to the latest Manufacturing Barometer, released by PricewaterhouseCoopers.

Among the findings: 1.9 percent of manufacturers expect to reduce their overall workforce over the next year. However, the Barometer also found that more manufacturers plan to add to their workforce than reduce it (36 percent as opposed to 23 percent).

Jorge Milo, a partner at PricewaterhouseCoopers, worked on the Barometer, and was intrigued by the seemingly contradictory findings regarding jobs.

"It's interesting that more of our respondents said they plan to add jobs…," he said. "But overall, the expectation is that there's likely to be a reduction in workforce."

Further analysis explains this yin-yang conclusion.

"What you have is that those who are still very focused on cost cutting will still aggressively pursue that," he said, "That, in turn, will effect reductions in workforce. And the folks thinking that there's optimism in both the U.S. and global economies will probably move slowly on the hiring front to avoid adding costs too soon."

Many of the findings in the Barometer show that manufacturers are optimistic about their industry and the economy overall. Yet a number of them are still gun-shy from the economic slump. As a result, many are waiting for conclusive evidence that things will stay improved. The "cautious optimism" cliché is hard to avoid, Milo agreed.

"CEOs see some [positive] signs, but aren't sure how sustainable they are," he said. "They want to be sure the early positive signs are more long-term before they start making changes in their hiring."

Milo points out that the findings about jobs aren't quite as contradictory as they may appear. The numbers vary from industry to industry. In addition, certain technologies make it viable, for example, for a com-pany to add three jobs in one department, yet cut 10 positions elsewhere.

The Barometer also found that 23 percent of manufacturers increased their prices in the first quarter of this year—as opposed to the 13 percent who reported raising prices in the previous quarter.

"People believe that some pricing needs to come up for the com-panies to show better revenue and earnings growth than they have," he said. "But there's a cautiousness there. If the underlying economy is not growing…the pricing might not stick, and they'll then have to retract them. They are sensitive about whether price increases will cause people to pull back and thus not buy or invest as much."

The findings are based on 80 interviews conducted in the first quarter of 2004 with a panel of senior executives from large, U.S.-based industrial manufacturing companies.

Milo added that while there seemed to be an upswing economically, many of these executives are not going to talk themselves into a false state of optimism.

"Things are looking up in the industrial manufacturing sector. There is some movement on pricing and the outlook for revenue growth," he said. "But people are reluctant to believe that it is sustainable for a longer period of time…. So there is some skepticism there, until they see [sustainable recovery], but they really do believe that there are signs of it."