In the third quarter of 2012, against the backdrop of continuing economic uncertainty and the looming fiscal cliff, PwC US’s Private Company Trendsetter Barometer survey found that private companies increased their projected revenue growth rate for the next 12 months, up from 8.3% to 8.6%. The increase was driven by private companies that sell solely in the U.S. Their projected revenue growth rate rose from 6.9% to 8.6%, highlighting domestic companies’ confidence about the next 12 months. International companies, on the other hand, reduced their revenue growth rate (8.5%, down from 9.7% last quarter).

Meanwhile, Trendsetter executives’ optimism about U.S. economic prospects for the next 12 months remained tempered, with 44% expressing confidence (down six points from 50% in the second quarter), 15% registering pessimism (up three points), and 41% voicing uncertainty (up 3 points). Despite the further dip in optimism, private companies are significantly more confident than they were this time last year, when only 27% expressed optimism.

Among international private companies, optimism about global economic prospects for the next 12 months remained subdued, changing little from the second quarter. Twenty-three percent of companies were optimistic, while a similar percentage registered pessimism (21%). The majority of international businesses remained uncertain (56%).

“As we approach the end of another year of slow growth, U.S. private companies are as uncertain as they are optimistic,” says Ken Esch, a partner with PwC’s Private Company Services practice. “These mixed sentiments have been common among Trendsetter companies in recent years. But private companies are resilient, and so although ongoing uncertainty has caused some businesses to delay or scale back plans, it hasn’t translated into inaction. The uptick in private companies’ projected growth rate shows that they feel they’ve moved past the worst of the economic downturn and are in a position to take advantage of growth opportunities, particularly here in the United States.”

Lack of demand was again the chief barrier to growth in the third quarter (74%). Private companies also cited legislative/regulatory pressures (52%), increased taxation (33%) and profitability/decreasing margins as leading barriers to growth.

As private companies prepare to transition into 2013, almost one-third (32%) of them are planning major new investments of capital over the next 12 months, down two points since the second quarter and six points below a year ago. Spending levels at 6.5% of sales are moderately high, above the second quarter, as companies position themselves for growth.

Increased operational spending is planned by 73% of private companies over the next 12 months (up 5 points), with information technology continuing to top the list of spending areas.

In line with private-company executives’ robust plans to reinvest in their businesses, banking activity nearly doubled in the third quarter, with 11% reporting new bank-loan financing activity, up from 6% in the second quarter. International companies operating in emerging markets led bank-loan activity (14%), followed closely by domestic companies (13%).

“Because of what’s currently looming from a tax perspective, coupled with frothy debt markets, we’re seeing more domestic M&A activity among our clients, as sellers try to lock in capital gains at lower rates before 2013,” says Esch. “Now, especially, is when private-company executives need to be in planning mode so that they start the new year in an advantageous position.”

PwC’s Private Company Trendsetter Barometer tracks the business issues and best practices of privately held US growth businesses. It incorporates the views of 234 chief executive officers (CEOs/CFOs): 136 from companies in the product sector and 98 in the service sector, averaging $337 million in enterprise revenue/sales, and including large, $500M-plus private companies.

To read PwC’s press release in its entirety click here.