More U.S. manufacturers are optimistic about the economy, but poor demand remains a top concern, according to a survey.

Forty-eight percent of U.S.-based industrial manufacturers surveyed by PricewaterhouseCoopers in the third quarter said they were optimistic about the U.S. economy over the next year, while only 43 percent had said so in the second quarter.

The largest number of manufacturers polled -- 45 percent -- did not expect their businesses to regain strength until the second half of 2010, the survey showed.

Twenty-three percent said they expected business to pick up in the first half of 2010 but 17 percent believed their companies were unlikely to recover until 2011.

U.S. manufacturers have varied in their individual outlooks. Companies such as Honeywell International Inc and Ingersoll-Rand Plc have said they expect better conditions in 2010 after a year of sharp declines in earnings and sales.

Caterpillar Inc forecast strong 2010 revenue growth, but United Technologies Corp was uncertain about how its revenues would turn out.

In the survey, 57 percent expected positive revenue growth in the next year. That is an improvement from the prior quarter's 43 percent, according to the survey.

Seventy-five percent said they were concerned about a lack of demand, down from 82 percent in the previous quarter, while 42 percent were worried about decreasing profitability -- though that was 8 points down.

The small improvement in optimism extended to companies' hiring and capital investment plans.

Of those surveyed, 25 percent said they plan to hire employees over the next 12 months -- an improvement of 8 percentage points from the prior quarter. Technicians, white collar workers and sales and marketing professionals would be among the top hiring categories, according to the survey.

Though 28 percent planned to cut the number of full-time staff, that number declined from the 30 percent who said so three months ago.

Thirty-seven percent plan major new capital investments in the next year, compared with 27 percent last quarter.

PwC polled senior executives at 60 industrial manufacturers from mid-July to mid-October.

(Reporting by Aarthi Sivaraman; Editing by Gary Hill and Tim Dobbyn)