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Business leaders lose confidence in U.S. economy

U.S. captains of industry continued to lose faith in the nation's economy during the fourth quarter, The Conference Board reported, and the business think tank's Measure of Business Confidence plunged by 16 points to a current reading of 31.

"Confidence among the nation's business leaders has not been this low since the second quarter of 1980," said the Board, when a reading of 29 was recorded. A reading of 50 or more points reflects more positive than negative responses from the American ceo's canvassed in the survey.

"The recent plunge in business confidence is yet another indication that a slower pace of economic growth will prevail in early 2001," said Lynn Franco, director of The Conference Board's Consumer Research Center. "But there is little evidence to suggest we are on the verge of a recession."

Eighty-five percent of business leaders polled in the fourth-quarter said they think that current economic conditions are worse today than six months ago. Fewer than 3 percent said current conditions are better than six months ago.

During the third quarter, just 29 percent, said business conditions were worsening, while 15 percent said they had improved.

In assessing their own industries, only 12 percent said they think conditions had improved over the past six months, while 62 percent held the opposite view.

And their short-term outlook for the economy is pessimistic. Sixty-five percent of business leaders polled said they expect conditions to get even worse during the coming months. Less than 8 percent expect economic conditions to improve. Assessing their respective industries, 50 percent expect conditions to deteriorate, and only 15 percent expect an improvement.

Asked how the economy is affecting the prices they can charge for their products, fewer than 9 percent said they anticipate increasing prices by more than 10 percent, and 45 percent said they would move them up no more than 5 percent.

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