America's small businesses are extremely anxious about the economy and fear a recession on the horizon. The past year has not been a good one for the small-business economy, and projections for the next twelve months are even less optimistic.

"Our survey shows plain and clear how the economic slowdown is affecting small business. When asked last year about their economic outlook, a majority of small-business owners responded positively," stated NSBA President Todd McCracken. "This year, a whopping 71 percent have a negative outlook on the economy - clearly small business is feeling the pinch."

Nearly half of all business owners (45 percent) expect a recession in the next year, while just nine percent say they anticipate economic expansion. Fifty percent (50 percent) cite "economic uncertainty" as one of the most significant challenges they face to the growth and survival of their business, with the cost of health insurance (35 percent) and lack of available capital (32 percent) rounding out the top three.

"Small businesses are buckling down, with nearly a quarter reporting no growth strategies planned for the coming year," reported NSBA Chair Marilyn Landis. "Sales and profits are down, and fewer jobs are being created in 2008 than at any period since 1993 when the survey began."

More than half (55 percent) of business owners surveyed said they have faced difficulty securing credit over the last year. Credit cards continue to be the largest primary source of financing for small businesses, yet 57 percent report that their credit card terms are worsening.

Despite the many negatives, including a marked decline in the confidence small-business owners expressed for the outlook of their own business - down from 81 percent in 2007 to 70 percent in 2008 – the majority still expressed confidence.

"While the 2008 NSBA Small Business Survey finds that small businesses have a very negative outlook about the economy as a whole, they remain somewhat optimistic about their own prospects," said Glen Bolger, partner and co-founder of Public Opinion Strategies. "This tracks closely with what we'd expect to see from self-starting entrepreneurs."

Spikes in energy costs have negatively impacted 77 percent of small-business owners. In response to rising costs, 37 percent of businesses have increased their prices, 33 percent have reduced their business travel, 11 percent have cut their production schedule, and 10 percent have reduced their workforce. On a more positive note, 18 percent of these companies have taken steps to invest in more energy efficient equipment or upgrades.

When asked about politics, respondents identified reducing the tax burden (40 percent) as their number one issue in the presidential elections, followed by health care costs (32 percent). While small-business owners want the issue of health care to be addressed, 70 percent reject the idea of an employer mandate, and 66 percent favor an individual mandate.