MASSACHUSETTS SMALL-BUSINESS OWNERS OPTIMISTIC ABOUT 1993: FLEET POLL SHOWS OWNERS EXPECT STRONG EMPLOYMENT EXPANSION, SUPPORT PRIVATIZATION
BOSTON, Dec. 16 /PRNewswire/ -- After years of an "on-again, off- again" recession, Massachusetts small-business owners at last seem willing to believe there is light at the end of the tunnel. According to the Fleet New England Poll, second in a series of polls conducted by Fleet Financial Group, 71 percent of the small-business owners in Massachusetts are more optimistic about 1993 than 1992. The poll also indicates that 42 percent of the owners of small- to mid-sized businesses expect to hire more staff in the coming year. The most dramatic growth throughout New England will likely be in banking and financial services, where 81 percent of those respondents indicated they expected to expand employment. Twenty-seven percent of the Massachusetts respondents expect to expand their physical plants -- possible good news for long-idle construction workers. Additionally, 61 percent plan to increase their marketing activities during 1993. Weathering the recession has forced many businesses to take aggressive actions to maintain or increase their profitability. The most common include cutting overhead (49 percent), reducing staff (37 percent) and improving services (24 percent). Twenty-two percent indicated they had cut employee benefits during the past year -- primarily in health care. "These findings, coupled with the improving indicators from Washington, are very welcome news," said Leo R. Breitman, chairman and CEO of Fleet Bank of Massachusetts. "Massachusetts -- indeed, all of New England -- has waited a long time for a turnaround. If Mr. Clinton is able to keep public confidence high during the early stages of his administration, we may be in full recovery by mid-year. It probably won't be a dramatic jump, but rather a slow, steady climb."
Expectations for the Clinton Administration
Massachusetts business owners offered their own observations as to which of the problems facing the new administration require the most immediate attention. In order of perceived importance, they are: -- Improving the economy 27 percent -- Reducing the deficit 26 percent -- Improving the educational system 12 percent -- Improving our global competitiveness 10 percent -- Improving our health care system 8 percent -- Rebuilding our national infrastructure 4 percent -- Holding the line on taxes 3 percent -- Rebuilding our inner cities 2 percent -- Reducing alcohol/drug abuse 2 percent When asked about the new Clinton Administration, the number one concern of Massachusetts' small-business owners, cited by 47 percent of the respondents, was an increase in taxes. Twelve percent feared any increases in federal regulations, while 10 percent were wary of a national health care system. Nonetheless, 55 percent of those surveyed say they expect to pay somewhat higher taxes under the Clinton Administration, and another 10 percent expect to pay much higher taxes. Federal spending is expected to increase at a higher rate than inflation, say two-thirds of those surveyed. The vast majority of those surveyed (83 percent) expect the federal deficit to continue to grow under Clinton. The largest single percentage, however (38 percent), expects the deficit to grow more slowly in the new administration. Twenty-nine percent expect the rate of increase to remain the same, while 16 percent believe a Clinton presidency will speed the growth of the deficit. Almost six in 10 of those businesses polled believe the economy needs additional stimulus to improve, while a substantial 41 percent believe it will improve on its own. Tinkering with the prime rate may not be the answer; half say the rate decrease has had some effect on their business, while almost the same number say it has had little or no effect. Additionally, the majority of respondents expect the prime rate to rise from its current 6.0 percent, with 57 percent indicating it would land somewhere between 6.6 percent and 8 percent by the end of 1993. More than half expect a drop in the national unemployment rate to between 5 percent and 7 percent, although the largest single group (37 percent) expect it to hover between 7.1 percent and 7.5 percent (the national unemployment rate are currently stands at 7.4 percent). Twenty-eight percent expect the rate of inflation to remain at or near its current 3.2 percent, while 59 percent expect it to rise to between 3.5 percent and 5.4 percent.
Strategies for Economic Recovery
By and large, Massachusetts' small- and mid-sized business owners are reasonably satisfied with the state's performance in economic development -- certainly much more so than New York business owners indicated in a similar poll last week. Almost six in 10 said they were at least partially satisfied with Massachusetts' economic development efforts (in New York, six in 10 were dissatisfied). Local and regional efforts, however, were less appreciated -- only 44 percent viewed local efforts favorably. The number one solution to make Massachusetts a more attractive place to do business, cited by more than half of the respondents, was to provide tax credits and incentives; reducing government regulations was a strategy lauded by 22 percent of those polled. Massachusetts business owners feel that the strong labor pool is the most positive factor about doing business in their state (19 percent), although location was cited by 15 percent of those polled. Significantly, 33 percent could not name the factor they considered most positive. The most negative factor, say 30 percent of the small- business owners, is high taxes, followed by overly restrictive regulations (13 percent). Eight percent each cited the general economic malaise and the cost of doing business. Despite that, only 10 percent of those polled indicated they were considering relocating out of state. The reasons most often cited were cost of labor (43 percent), taxes (19 percent) and better opportunities elsewhere (19 percent). Although only 12 percent indicated they had participated, or shortly planned to participate in a public-private partnership, 77 percent believe privatization of certain government services offers substantial savings. Top choices for privatization include: Postal Service 35 percent Garbage 32 percent Prisons 27 percent Maintenance/janitorial 26 percent Parks 19 percent Schools 19 percent Air traffic control 11 percent "Privatization and public-private partnerships may represent the future of government and government-type services," said Breitman. "The fact is, there are certain types of services that may be more cost- effectively performed by private companies. It is time for the business community to work more closely with government, sharing the lessons in productivity we've all learned in the last few years." The second Fleet New England Poll was conducted via telephone from Dec. 3-10 by Penn & Schoen Associates, a national polling firm, on behalf of Fleet Financial Group. The random sample was comprised of approximately 400 financial and top management executives of New England companies with $5 million to $25 million in annual sales. Fleet Financial Group operates seven banks in the Northeast, including Fleet Bank of Massachusetts. Fleet Bank of Massachusetts has assets exceeding $8 billion and 150 offices throughout the state. Fleet Financial Group is a $45-billion diversified financial services company listed on the New York Stock Exchange (NYSE: FLT), with approximately 1,300 offices nationwide. Fleet's lines of business include commercial and consumer banking, mortgage banking, consumer finance, asset-based lending, investment management and student loan processing. -0- 12/15/92 /CONTACT: Robert W. Lougee, director of corporate communication, 401-278-5879, Meg Pier, 617-573-7733, or Thomas Lavelle, 401-278-3003, all of Fleet/ (FLT)
CO: Fleet Bank of Massachusetts ST: Massachusetts IN: FIN SU:
CN -- NE001 -- 7513 12/16/92 07:01 EST
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|Date:||Dec 16, 1992|
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