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ENTREPRENEURS SEE ONLY SLIGHT SIGNS OF ECONOMIC RECOVERY IN FIRST QUARTER OF 1993

 WASHINGTON, Jan. 4 /PRNewswire/ -- The chief executives of America's leading entrepreneurial firms foresee a slight and fragile economic recovery in the first quarter of 1993, according to a survey of members of the American Business Conference (ABC).
 Asked to compare prospects for their companies in the first quarter of 1993 to results from the fourth quarter of 1992, ABC members, chief executive officers of fast-growing midsize firms, predicted modest improvements in key business indicators.
 Economic Reality Check
 "This survey should serve as a post-holiday reality check for those who believe a strong recovery is imminent," said Barry Rogstad, president of the American Business Conference. "At best, we can point to some hopeful signs. A net 45 percent of ABC members anticipate higher sales, a net 40 percent plan to increase their investment outlays, and a net 43 percent foresee higher wages for current employees. These data represent important improvements over our last quarterly survey. The wage data in particular suggest progress in worker productivity."
 But Rogstad noted that other results from the survey are troubling. "Only a net 9 percent of ABC firms plan to expand employment in the first quarter of 1993," he said. "And a net 17 percent anticipate higher margins on their sales. In other words, our companies are telling us that in the current economic environment, business success means keeping margins razor thin while emphasizing productivity gains among the existing work force. ABC members don't yet see much room for expansion either in profits or job creation. And, of course, larger profits and greater employment are what a strong recovery is all about."
 Although ABC members reported a slight upward tick in product prices, the cost of purchased materials, and the cost of funds, the change is slight and not indicative of a return to inflation. A net 12 percent of ABC members report an easing of capital availability, down from the previous survey.
 Summary of Survey Results
 Summarizing the survey results, Rogstad made two observations. "First, the United States is not in the midst of a self-correcting business cycle. The structural problems that plagued the nation over the last several years did not disappear with the presidential election. Business debt, defense downsizing, overdevelopment in the real estate industry, and, above all else, a large and growing federal budget deficit, still conspire to limit economic recovery. To make matters even worse, the economies of our major trading partners are slowing, thereby reducing ABC firms' international sales.
 "Second, since our problems are long-term and structural, it follows that their solutions are long-term and structural. Deficit reduction, saving and investment incentives, regulatory reform, and bilateral and multilateral trade liberalization should all be at the top of President-elect Clinton's list of policy priorities. The best short-term stimulus that the new Clinton administration could provide to American business is demonstrating that it is addressing these long-term issues."
 Founded in 1981, the American Business Conference is the only business organization that focuses its attention on midsized, high- growth companies -- the companies that create jobs and raise America's standard of living.
 ABC members -- a select group of CEO-entrepreneurs with outstanding track records of success -- represent American business at its best.
 ABC supports public policies designed to promote economic growth and a higher standard of living for all Americans.
 ABC ENTREPRENEURIAL SURVEY
 CEOs Assess Outlook for their Firms
 in 1st Qtr. 1993 v. 4th Qtr. 1992 Results
 CEO Expectations for Previous Survey
 1st Qtr 93 v 4th Qtr 92 (4th Qtr 92 v 3rd Qtr 92)
 Sales/Shipments 45 percent 37 percent
 Net Margins 17 percent 18 percent
 Product Prices 2 percent -3 percent
 Employment 9 percent 0 percent
 Wages 43 percent 23 percent
 Cost of Materials 6 percent -4 percent
 Investment Outlays 40 percent 27 percent
 Cost of Funds 11 percent -50 percent
 Capital
 Availability 12 percent 21 percent
 Note: Data represent net shift of opinion of ABC CEOs.
 For example, the 45 percent for Sales/Shipments equals the difference between those ABC CEOs Who Anticipate Higher Sales (58 percent) and Those Who Anticipate Lower Sales (13 percent). For a complete breakdown of survey responses, see following chart.
 CEO Expectations for 1st Qtr. '93
 Compared to 4th Qtr. '92(A) Net
 Higher Same Lower Change
 Sales/Shipments 58 pct. 29 pct. 13 pct. 45 pct.
 Net Margins 30 pct. 57 pct. 13 pct. 17 pct.
 Product Prices 17 pct. 68 pct. 15 pct. 2 pct.
 Employment 34 pct. 41 pct. 25 pct. 9 pct.
 Wages 47 pct. 49 pct. 4 pct. 43 pct.
 Cost of Purchased
 Materials 23 pct. 60 pct. 17 pct. 6 pct.
 Investment Outlays 52 pct. 36 pct. 12 pct. 40 pct.
 Cost of Funds 23 pct. 65 pct. 12 pct. 11 pct.
 Availability of
 Capital/Credit 18 pct. 76 pct. 6 pct. 12 pct.
 (A) Numbers indicate the percentage of ABC members responding to the survey.
 -0- 1/4/93
 /CONTACT: John Endean, V.P. policy, American Business Conference, 202-822-9300/


CO: American Business Conference ST: District of Columbia IN: SU: ECO

TW -- DC004 -- 1167 01/04/93 08:42 EST
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