The National Small Business Association (NSBA) issued a mid-year report Sept. 22 that compiles recent survey and poll data, providing a snapshot of how small businesses are dealing with the current economic slowdown. The result was a negative outlook for the U.S. economy, with 79 percent of small business owners expecting a flat economy or recession in the-coming year.

The NSBA Mid-Year Economic Report analyzes responses from a sampling of NSBA members on their current economic outlook, job and business growth, business financing and several other key economic indicators for the small-business community.

"Small-business owners are feeling less-confident in nearly every way, particularly with banks' ability to keep their money safe," said Todd McCracken, president of the NSBA. "Decreasing home values, a tight credit market and failing financial institutions have led to 67 percent of small-business owners who believe that the U.S. economy is worse off today than it was five years ago."

The report also stated that 68 percent of small-business owners say that FDIC insurance is not adequate enough to insure their business accounts. And nearly two-thirds have already or are considering taking action such as spreading deposits across multiple institutions to reduce their financial risk.

When asked to name the three most significant challenges to the future growth and survival of their business, 53 percent of respondents said economic uncertainty, 46 percent cited the cost of health-insurance benefits, and 34 percent said federal taxes.

In addition 87 percent of small-business owners said in August that increasing energy costs are having a negative impact on their business. That was up from 77 percent saying that in February, according to the NSBA.

Despite these challenges, 43 percent of small-business owners said they expect their company's net profits to increase in the next 12 months, 33 percent expect decreased profits, and 24 percent expect no change, the report found.

That's an improvement over what these businesses reported for the last 12 months 40 percent reported increased profits, 38 percent had lower profits, and 22 percent reported no change.

The report, which can be accessed at www.nsba.biz, was compiled from late-August and early-September surveys, before the most recent bank failures and bailouts.

The NSBA, founded in 1937, says it advocates on behalf of entrepreneurs and reaches more than 150,000 small businesses.

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