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BUSINESS CONFIDENCE PLUNGES IN OCTOBER, ACCORDING TO U.S. CHAMBER OF COMMERCE

 BUSINESS CONFIDENCE PLUNGES IN OCTOBER,
 ACCORDING TO U.S. CHAMBER OF COMMERCE
 /ADVANCE/ WASHINGTON, Nov. 5 /PRNewswire/ -- American business confidence in the economy plunged 8.1 percent in October to its lowest level since last December, according to the U.S. Chamber of Commerce's latest Business Confidence Index.
 The drop in the Index from 58 in August to 53.3 in October followed a 9 percent decline of 6.2 points from June to August. These back-to-back declines followed six months of increasing optimism during the first half of the year. The index is an average of three separate indexes reflecting the respondents' outlook for the economy, business sales and employment prospects over the next six months.
 In October, the index for the economic outlook dropped from 56.7 to 53.2. Only 32.4 percent of the 8,189 respondents expected the economy to improve in the next six months while 26.1 percent saw it moving downward. In August, 37.7 percent saw improvement and 24.4 percent saw a decline.
 Respondents' attitudes changed even more when it came to expectations of their own businesses' sales. The index for sales dropped from 63.8 percent to 56.2, with only 36.7 percent expecting a growth and 24.2 percent expecting a decline.
 The index based on the expectation of employment growth also dropped, from 53.5 to 50.6, with 18.5 percent expecting to hire and 17.4 percent expecting to lay off workers.
 "The August fall-off in business confidence was more abstract -- businesses lost confidence in the economy, but confidence in their own sales remained up," said Lawrence A. Hunter, vice president and chief economist of the U.S. Chamber of Commerce. "However, in October, the drop was concrete and revealed a decline in optimism about their own sales, a sure sign that businesses will continue to cut costs to the bone and hold back on significant new investment spending."
 The Business Confidence Index is based on The Business Ballot, a readership poll mailed six times a year with the Business Advocate, the bimonthly supplement to Nation's Business magazine. An index of 50 or more indicates the prospect for an expanding economy. An index of 70 or more portends stronger than trend growth.
 U.S. Chamber of Commerce
 Business Confidence Index
 (From June 1991 When Bimonthly Indexes Started)
 (Earlier Indexes Were 39.5 in May 1990 and 36.3 in Feb. 1991)
 JUN 91 AUG 91 OCT 91 DEC 91 FEB 92
 Business
 Confidence
 Index 59.4 55.9 45.4 39.3 59.1
 Economy
 Up 45.8 pct 39.4 pct 23.6 pct 17.6 pct 47.4 pct
 Down 23.5 25.9 32.3 45.3 16.8
 Same 30.7 34.7 44.0 37.1 35.8
 Index 61.2 56.8 45.6 36.2 65.3
 Sales:
 Up 47.3 pct 43.5 pct 29.6 pct 23.6 pct 41.5 pct
 Down 21.6 22.9 36.3 40.4 22.2
 Same 30.5 33.6 34.1 35.7 36.3
 Index 62.6 60.3 46.7 41.5 59.7
 Employment:
 Up 23.1 pct 18.5 pct 13.2 pct 11.2 pct 20.1 pct
 Down 14.3 17.3 25.6 30.7 15.8
 Same 62.6 64.1 61.2 58.1 64.1
 Index 54.4 50.6 43.8 40.3 52.2
 Respondents: 6,389 8,973 8,549 8,044 7,924
 U.S. Chamber of Commerce Business Confidence Index
 (Cont.)
 APR 92 JUN 92 AUG 92 OCT 92
 Business
 Confidence
 Index 63.3 64.2 58.0 53.3
 Economy
 Up 53.9 pct 54.4 pct 37.7 pct 32.4 pct
 Down 13.1 12.6 24.4 26.1
 Same 33.0 33.0 37.9 41.5
 Index 70.4 70.9 56.7 53.2
 Sales:
 Up 48.8 pct 49.8 pct 48.7 pct 36.6 pct
 Down 18.5 17.0 21.2 24.2
 Same 32.6 33.2 30.1 39.2
 Index 65.1 66.4 63.8 56.2
 Employment:
 Up 22.7 pct 23.5 pct 24.1 pct 18.5 pct
 Down 13.8 12.9 17.2 17.4
 Same 63.5 63.6 58.7 64.1
 Index 54.5 55.3 53.5 50.6
 Respondents: 7,446 8,328 5,515 8,191
 -0- 11/5/92
 /NOTE: For additional information on the August Business Ballot or to arrange an interview with Hunter, call the contact below./
 /CONTACT: Thomas Love of the U.S. Chamber of Commerce, media relations department, 202-463-5682/ CO: U.S. Chamber of Commerce ST: District of Columbia IN: SU: ECO


MH -- DC023 -- 2492 11/04/92 12:48 EST
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