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LOWERED GROWTH EXPECTATIONS STALL GROWTH COMPANIES' PLANS, COOPERS & LYBRAND 'TRENDSETTER BAROMETER' SHOWS

 LOWERED GROWTH EXPECTATIONS STALL GROWTH COMPANIES' PLANS,
 COOPERS & LYBRAND 'TRENDSETTER BAROMETER' SHOWS
 NEW YORK, Nov. 12 /PRNewswire/ -- CEOs of America's fastest growing companies say they were offered better borrowing terms in the third quarter 1992 than the previous period, but lowered growth expectations seem to have inhibited them from taking advantage of these opportunities, according to the latest Coopers & Lybrand 'Trendsetter Barometer' survey.
 Only 30 percent of growth company CEOs took on additional bank financing in the third quarter, down from the more typical 35 percent level found in the prior quarter. Even fewer CEOs increased their credit availability: 26 percent, compared with 33 percent in the second quarter. This reluctance appears to be consistent with these CEOs' reduced expectations for growth over the next 12 months, which decreased from 26 percent in June to 22 percent in September.
 Diminished expectations tempered financing at a time when interest rates for bank financing declined from 7.85 percent to 7.48 percent, or 1.48 percent over the 6 percent prime rate, which also declined from the previous quarter.
 Over the past year, bank financing interest rates have declined by 25 percent, from 9.96 percent to the current 7.48 percent. Despite the drop, "Trendsetter Barometer" CEOs reporting new bank loans declined from 40 percent to the current 30 percent level -- a drop of 25 percent since September 1991.
 "The hesitancy of these CEOs to take on additional financing at a time when rates are so low is a strong indication of their continued fears for the economy and, in particular, their own companies," said George Auxier, national director of emerging business services for Coopers & Lybrand, the international professional services firm.
 "While part of the answer may be that growth companies have already availed themselves of lower interest rates to reduce their internal cost structures, what is troubling is the trend toward reduced bank financing and lower use of available credit," he added. "Despite their entrepreneurial tendencies toward aggressive marketing actions in tough times, these CEOs are shying away from aggressive investment growth -- just the tactics that could lead to greater market share or expansion into other product lines or geographic sectors."
 And the picture does not appear to be getting brighter. One-third (34 percent) of growth company CEOs say that lack of capital for investment is likely to be a potential barrier to their own company's growth over the next 12 months, yet another indication of their reduced expectations over the next year.
 "It will be important to see these firms' fourth quarter plans and investment activities, especially with the growth incentives proposed by President-elect Clinton during the campaign," said Auxier. "An early economic signal of growth may be increased bank financing and use of available credit by 'Trendsetter Barometer' CEOs."
 Coopers & Lybrand's "Trendsetter Barometer" is developed and compiled by the firm's Emerging Business Services group with assistance from the opinion and economic research firm of Business Science International. At each Coopers & Lybrand office, an Emerging Business Services team is available to serve the needs of growing and midsize companies.
 One of the world's leading professional services firms, Coopers & Lybrand provides solutions for businesses in a wide range of industries. The firm offers its clients the expertise of more than 16,000 professionals and staff in 91 U.S. offices and more than 67,000 people in 121 countries worldwide.
 Coopers & Lybrand's "Trendsetter Barometer" interviewed CEOs of 302 product and service companies identified in the media as the fastest growing U.S. businesses over the last five years. The surveyed companies range in size from approximately $1 million to $50 million in revenue/sales.
 -0- 11/12/92
 /NOTE TO EDITORS: Graphic art is available upon request./
 /CONTACT: Maggie O'Donovan of Coopers & Lybrand, 212-536-3174/ CO: Coopers & Lybrand ST: New York IN: FIN SU: ECO


PS-CK -- NY035 -- 0141 11/12/92 11:24 EST
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Date:Nov 12, 1992
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