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NEW YORK CITY'S BUSINESS CONFIDENCE INDEX SOARS IN NATWEST SURVEY; MORE CITY CEOs UNHAPPY WITH BUSINESS LOCATION

 NEW YORK CITY'S BUSINESS CONFIDENCE INDEX SOARS IN NATWEST SURVEY;
 MORE CITY CEOs UNHAPPY WITH BUSINESS LOCATION
 NEW YORK, May 28 /PRNewswire/ -- Chief executives heading mid-size firms in New York City are much more optimistic about business prospects than a year ago, according to the results of a survey released today by National Westminster Bancorp. The survey also found an increasing number of CEOs unhappy with their company locations, and a rather high percentage indicating that they are likely to move.
 The city's Business Confidence Index, a composite of future expectations and present performance, has rebounded strongly. Last year, the Index tumbled to 51, from 75 in 1990, but now it has risen to 92. The Index began from a base rate of 100 in 1988.
 Of the 133 New York City CEOs surveyed, of a total of 551 throughout the Metro Region, 38 percent said that business had improved from a year ago, compared to 28 percent who said it declined. Looking ahead, a much greater number, 70 percent, expect improvement. Just 6 percent anticipate that business will be worse.
 The CEOs' business optimism is supported by the fact that firms are operating at 80.7 percent of capacity, compared to 76.5 percent a year ago, and 52 percent plan to expand in the next few years, compared to a 45 percent response a year ago.
 Yet, 47 percent of the CEOs said that cash flow had decreased, with just 21 percent reporting improved cash flow levels. And while 61 percent had some degree of concern about their company's debt level, a greater percentage, 68 percent, are concerned about their customers' ability to pay debts.
 "Our survey began six years ago with the regional economy riding high," said Peter Radford, NatWest Bancorp's chief economist. "We saw the executives' optimism levels drop substantially indicating a recession long before one arrived. Their responses now reveal that we hit bottom a year ago and the trend is up. But clearly, confidence levels are tempered. This recovery will not resemble any other, and the CEOs are letting us know this."
 In fact, roughly six out of ten New York City CEOs describe the current recession as a "fundamental shift" in the nation's economy, while about a third think it is a "temporary downturn." And while many New York City CEOs believe the worst of the recession is over, most expect the recovery to come slowly: 34 percent believe a full economic recovery will take two years or longer.
 The NatWest survey found an increasing number of New York City CEOs disenchanted with their firm's location. While 45 percent rate their location as either excellent or very good, this is down sharply from the 77 percent degree of satisfaction registered a year ago. The uneasiness with location may explain why more firms could be relocating. Last year only 9 percent had indicated that they would definitely or probably move in the next year or two. This year 19 percent have the same intentions.
 "With high commercial vacancy rates, many firms anticipated that their leases would be renegotiated," said Radford. "This might have occurred for larger firms, but for the majority of mid-size firms, it seems, lease negotiations either didn't materialize or the CEOs didn't receive as great a deal on a renewal. This translates into a bit of dissatisfaction over location."
 Where would they go? Half say that they would consider relocating within New York City, another 20 percent said New Jersey, an equal number said outside the metro region, 16 percent said Westchester, 15 percent said Connecticut, and only 8 percent said they would consider Long Island.
 "What's interesting is that all of the percentages are lower compared to last year," said Radford, "meaning that the executives really aren't terribly enthused about any area." In previous years, the city CEOs' clear choice had been New Jersey, but New Jersey's status has dipped. In fact, in the bank's 1988 survey, 54 percent of the New York City executives surveyed said they would consider New Jersey, a dramatically higher response than the 20 percent obtained from this year's survey.
 In sizing up New York City mid-size companies: 88 percent are privately held, 29 percent export and 38 percent import. Seventy-eight percent of the CEOs said they worked the same number of hours as last year and 17 percent said more. And 38 percent said their income increased, while 30 percent said it decreased. To coincide with improved business performance, 51 percent anticipate their pay to increase in the year ahead.
 NatWest's sixth annual survey of CEOs, conducted by Northstar Research Associates Inc., covers mid-sized firms under $250 million in annual sales.
 National Westminster Bancorp, headquartered in New York, has $22 billion in assets. Its main subsidiaries are NatWest USA and NatWest NJ, which operate more than 260 branch offices in New York and New Jersey. NatWest Bancorp is a wholly-owned subsidiary of National Westminster Bank PLC, the London-based international banking and financial services organization.
 -0- 5/28/92
 /CONTACT: Tim Connolly of NatWest, 201-547-7533/ CO: ST: New York IN: SU: ECO


TS-GK -- NY006 -- 4686 05/28/92 11:16 EDT
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Date:May 28, 1992
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