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SMALL BUSINESSES REPORT SLUGGISH SALES IN THIRD QUARTER

 SMALL BUSINESSES REPORT SLUGGISH SALES IN THIRD QUARTER
 CLEVELAND, Nov. 11 /PRNewswire/ -- Third-quarter sales decreased or stayed the same at 69 percent of local small businesses, according to the Small Business Monitor survey conducted by the Council of Smaller Enterprises (COSE).
 Of the 300 survey respondents, 31 percent reported sales increased during the third quarter, while 40 percent said they stayed the same, and 29 percent saw a decline in revenue. These results indicate the economy has slowed somewhat since the second quarter, when 41 percent of the small businesses said sales increased, 36 percent said they stayed the same, and 23 percent said they decreased.
 The third-quarter sales figures failed to measure up to expectations. Three months ago, 50 percent of the survey respondents said they thought sales would rise in the third quarter, 45 percent predicted they would stay the same, and six percent expected a decrease.
 "Because of the sluggish sales of the third quarter, and possibly because of election-year uncertainty, small businesses seem to be less optimistic about the fourth quarter," said Peg Gallagher, director of research for the Greater Cleveland Growth Association, of which COSE is a division.
 Overall, 10 percent said they are very optimistic about the future of small business in general, 54 percent said they are optimistic, 31 percent said they are pessimistic, and 4 percent said they are very pessimistic. Expectations were rosier three months ago, when 17 percent said they were very optimistic, 59 percent said they were optimistic, 22 percent said they were pessimistic, and two percent said they were very pessimistic.
 For the near future, 48 percent of the respondents predicted sales would increase in the fourth quarter, 43 percent expect sales to stay the same, and nine percent said sales would decline.
 "Retailers seem to be the most optimistic, because of the coming holiday season," Gallagher said. Of 79 retailers who participated in the survey, 63 percent thought sales would rise during the fourth quarter, 28 percent expected sales to stay the same, and nine percent predicted a decrease.
 On the hiring front, 68 percent of the businesses reported their employment levels stayed the same during the third quarter, 15 percent said they increased their personnel, and 17 percent said they reduced their staff levels. For the fourth quarter, 72 percent expect no change in employment levels at their companies, 22 percent expect to add employees, and six percent forecast reduction.
 Employment training was the special topic of the third-quarter survey.
 "The results indicate that many employees regard small businesses as a training ground for larger companies, but the small businesses themselves complain that the new employees they hire are less qualified and need more training compared with a few years ago," Gallagher said. "Also, contrary to what might have been expected, only a few employees cite lack of health care as a reason to leave a small business."
 Survey results included:
 -- Sixty-eight percent of the businesses did not hire people directly from vocational or training programs, nor did they send employees to these programs for additional training.
 -- Of businesses with positions requiring a high school diploma or less, 65 percent said they are doing more on-the-job training than they did five years ago. Fifty percent said workers are less qualified and 37 percent said the jobs are more complicated than they were five years ago.
 -- Thirty-six percent said hard work and productivity is what they look for most when they consider a job applicant, while an identical number said they look first for dependability and trustworthiness.
 -- At companies where one or more employees voluntarily left their jobs in the past two years, 52 percent of those employees cited a better job offer as the reason, eight percent retired, eight percent cited child care or parental care needs, and only three percent cited lack of health care benefits.
 -- Sixty-eight percent of the companies plan no change in their capital spending for the fourth quarter, 15 percent plan to increase spending, and 17 percent plan to decrease it. For the third quarter, those figures were 64 percent, 22 percent and 13 percent, respectively.
 -- Borrowing plans are unchanged, with 72 percent saying it is unlikely that they would need to borrow money during the fourth quarter. Three months ago, 71 percent said it was unlikely they would need to borrow in the third quarter.
 COSE earlier this year set up a panel of randomly chosen member companies to participate in the Small Business Monitor. Each quarter, the companies are surveyed on sales, employment, capital spending, borrowing, and expectations for the future. Each survey also covers a special topic of interest to small businesses.
 COSE, a division of the Greater Cleveland Growth Association, is the nation's largest community-based organization dedicated solely to small business.
 -0- 11/11/92
 /CONTACT: Peg Gallagher, director of research of the Greater Cleveland Growth Association, 216-621-3300/ CO: Greater Cleveland Growth Association ST: Ohio IN: SU:


BM -- CL008 -- 9673 11/11/92 11:00 EST
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