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CALIFORNIA SMALL BUSINESSES STRUGGLING, SOUTHERN SECTOR WORST IN NATION, SURVEY SAYS

 WASHINGTON, Nov. 25 ~PRNewswire~ -- California small businesses are facing worse economic conditions than the United States as a whole, the nation's largest small-business advocacy organization, the National Federation of Independent Business, reported today.
 According to an NFIB Foundation~Wells Fargo Bank survey of nearly 800 California entrepreneurs, small firms there face far more difficult economic conditions than those in other parts of the country and Southern California firms are worse off yet.
 The primary problem, NFIB-California state director Martyn Hopper of Sacramento, Calif., said, is that the state's markets are shrinking in everything from defense industries to real estate. In the last three months, nearly one-fifth more Southern California small-business owners reported sales declines than increases.
 NFIB, which represents nearly 600,000 small U.S. firms, including more than 47,000 in California, reported that small-business optimism in the southern part of the state was nearly 7 percentage points below the national figure: 97.7 vs. 104.4. Upstate, the index was just 2 points under the U.S. level.
 "The gap between California and the rest of the country would be even larger if national figures did not include the state," said NFIB chief economist William C. Dunkelberg, a former Stanford economics professor.
 More than one-fourth of the small-business owners in Southern California cited poor sales as their single most important problem, with regulation and red tape second on the list.
 Statewide, 21 percent cut prices in an effort to boost sales, while only 12 percent hiked them. Again, fewer Northern California firms trimmed prices. Capital spending was weak, inventories were reduced and employment stagnated across the state.
 Looking ahead, 5 percent more Southern California business owners expect declining sales in the next three months than their northern counterparts. Both regions fared poorly when compared to the national figure where 18 percentage points more anticipate better sales ahead.
 But the economist noted the trend is probably temporary. Small business distress was heaviest in Texas and surrounding states during the mid-1980s, then it moved to New England, and now it is centered in Southern California, he said.
 -0- 11~25~92
 ~CONTACT: Terry Hill, 202-554-9000, or Martyn Hopper, 916-448-9904, both of the National Federation of Independent Business~


CO: National Federation of Independent Business ST: California IN: SU: ECO

DC -- DC021 -- 1631 11~25~92 16:08 EST
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Date:Nov 25, 1992
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