Confidence Up Slightly From Last Year--Survey : Economy: Small business owners rate the future in terms of interest rates, inflation, costs and President Bush’s performance.

Small-business owners are slightly more optimistic about the outlook for their businesses and the economy, Dunn & Bradstreet Corp. said in an annual survey.

The survey of 5,000 small businesses found that 61% of the respondents are optimistic about the next 12 to 18 months. Last year, 59% were optimistic, the lowest reading since the 1982 recession.

“Small-business owners are usually an extremely positive group, but this year their optimism is barely higher than it was a year ago,” said Patricia W. Hamilton, editor-in-chief of D&B; Reports, Dunn & Bradsteet’s magazine for small businesses, which conducted the survey released Sunday.

The respondents were confident that interest rates will hold steady in the next 12 to 18 months. Fifty-three percent said they believe that interest rates will remain the same, while 19% said they would fall and 18% said they would move higher. Last year, the respondents wrongly predicted interest rates would rise.

The respondents showed some anxiety over the prospect for higher inflation, with 53% saying prices would rise faster in the coming year and 47% saying inflation would hold steady.

The small businesses responding to the survey said their chief worries were, in order of importance: cash-flow squeeze, controlling costs, continuing recession, finding qualified employees and health insurance.

For the third year in a row, small businesses reported sharp increases in health insurance costs. Thirty-five percent said the increase was between 10% and 20%; 22% said the increase was between 20% and 30%, and 6% put the increase over 50%.

President Bush might be developing some problems with small businesses. The President’s performance since taking office was deemed excellent by 17% of the respondents, a drop from last year’s 20%. Forty-six percent, down from 50%, graded the President as good, while 25%, up from 24%, said he was doing a fair job. Seven percent rated his performance as poor, up from 5%.

The D&B; Reports survey, completed Oct. 15, was mailed Sept. 7 to 5,000 randomly selected small businesses with sales less than $12 million.

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