As global economic uncertainty grows, executives at private companies have grown less optimistic, although they have continued to spend money to improve their businesses, according to PwC US’s Private Company Trendsetter Barometer released on Thursday.

PwC's Private Company Trendsetter Barometer tracks the business issues and standard industry practices of privately held US businesses by polling 240 CEOs and CFOs, 132 from companies in the product sector and 108 in the service sector, averaging $293 million in enterprise revenue/sales, and including large, $300M-plus private companies.

Out of the 140 polled just 43% of executives said they’re optimistic about the outlook for the US economy over the next year, 21 points lower than the previous quarter’s optimism level of 64%. At the same time uncertainty about the U.S. economy rose to 42%, a jump of 13 points from last quarter and in line with one year ago. Fifty-two percent of international private companies report being uncertain about the global economic outlook and only 38% express optimism, down 16 points from last quarter.

“The decline in optimism reflects Trendsetter executives’ growing unease about a range of issues,” says Ken Esch, a partner with PwC’s Private Company Services practice, in a press release. “Those issues include debt crises at home and abroad, stock market volatility around the globe, high commodity prices, and rising political and social tensions in a growing number of countries. Although these conditions aren't causing Trendsetter companies to retrench - planned spending remains strong - private businesses are nonetheless more alert to potential warning signs than they were pre-2008.”

Revenue forecasts by executives also tumbled this past quarter, though they are still well above levels of a year ago. Private companies’ forecasted average revenue growth rate fell to 9.5%, down from 10.2% the previous quarter, but up from a year earlier, when it was 9.1%. For private businesses selling goods and services abroad, own-company average revenue forecasts decreased from last quarter’s 10.7% to 9.5%, matching their domestic-only peers’ forecast of 9.5%, PwC reported.

The percentage of Trendsetter respondents projecting positive own-company growth for the next year rose just slightly to 88% (up three points from last quarter) but is up 12 points from projections a year ago. Forty percent of Trendsetter executives forecast double-digit revenue growth, and 48% expect single-digit growth, PwC added.

Costs and prices continued trending upward in the second quarter of 2011. Among companies polled, costs increased 27% and decreased for 8%, resulting in a net increase of 19%. Prices rose for 19% of those surveyed and fell for 9%, with a net increase of 10%. The net increase in cost was much higher among private companies selling in China, India, and Brazil (21%), which was reflected in the significant gross-margin contraction they experienced this quarter (net negative 21%).

“Downward pressure on margins for private companies that sell in emerging markets reflects not only high oil and energy prices, which drive up transportation costs, but also signals increasing labor costs in those markets," said Esch. "While it’s too early to say whether this downward pressure will continue, we’ll be watching the numbers closely. In the meantime, what we can say with relative certainty is that the rate of growth in emerging markets will outpace that in mature markets for the foreseeable future. A temporary shrinking of margins is therefore unlikely to deter growth-focused companies from pursuing opportunities in these regions.”

Meanwhile, despite uncertainty and rising costs, private companies are still planning to spend in critical areas over the next 12 months, with international marketers continuing to far outpace their domestic counterparts in prospective spending. Fifty-four percent of international marketers are planning major capital investments, while only 35% of domestic-only private companies are doing so.

International Trendsetter companies also are planning to increase operational spending, including increases focusing on information technology, new product/service introductions, and marketing and sales promotion. Twenty-four percent of companies expect to increase spending for geographic expansion, up three points from last quarter.

“To drive growth, private companies need to spend some of their cash reserves," said Esch.

Yet hiring has begun to slow. Private companies are planning on hiring fewer employees over the next year, with planned net hiring dropping to 58%, down from the previous quarter's 63%. Nevertheless, only 3% of firms expect net reductions, and 39% plan to maintain the size of their workforce.

Potential lack of demand is the biggest challenge to growth over the next 12 months, according to 75% of chief executives, up eight points from the previous quarter. Legislative/regulatory pressures rank second (52%), followed by concern about oil/energy prices (45%). Larger companies are much more worried about oil/energy prices than smaller ones.

“Considering the number and scale of tumultuous developments this year -in the Middle East, Japan, the Eurozone, and Washington -it's no wonder that private companies' anxiety has increased,”says Esch. “Yt calm heads are clearly prevailing. Although the crisis of a few years ago underscored the imperative to heed warning signs, it also revealed the importance of staying the course. So far, private companies are taking things in stride, opting to put in motion carefully considered post-crisis plans rather than take a reactive stance.”