Small business economic confidence continues to slide, marked by another drop in the number of owners who say that economic conditions for their business are getting better. In April, 24 percent of owners said things were looking up, down from 45 percent at this time last year and hitting the lowest reading since the survey began in August 2006. Overall, the Discover Small Business Watch declined to 76.1 in April, down from 77.8 in March.

"Small business owners are clearly cautious about the economy and demonstrating resiliency," said Sastry Rachakonda, director of Discover's business credit card. "While their sentiments may be influenced by broader market conditions, their business cash flow situation has improved over the last month."

The numbers of owners who say economic conditions for their businesses are getting worse has slipped considerably. A year ago, less than a third described conditions as worsening, but in April nearly one out of every two business owners said they believe the situation is getting worse.

April Key Findings:

-- 55 percent rate the U.S. economy as "poor" compared to 53 percent who said the same in March. The combined percentage of small business owners who rate the U.S. economy as "excellent" or "good" remained unchanged this month at 16 percent.

-- 44 percent say they have experienced cash flow issues over the last 90 days, a slight decrease from 47 percent in March.

-- Only 27 percent of owners say they plan to increase spending on business development in April, while 44 percent plan to decrease spending. Both of these data points are the lowest results for this question since the Watch's inception 20 months ago.

Poll: High Gas Prices Are Hurting Profitability for Overwhelming Majority of Small Business Owners

Three-fourths of small business owners (75 percent) say that rising gasoline prices have an effect on the profitability of their business. Among this group, 86 percent are affected negatively. "Rising gas prices hurt small business owners because gasoline costs comprise a bigger portion of their expenses compared to larger companies," Rachakonda said. "Because gas is more a part of operating costs than materials, it is not an easy pass-through expense for people like contractors, landscapers and others who do a lot of driving."

Another area of concern for small business operators is the ability of their customers to pay on time. In September 2007, a Watch survey found that of the 30 percent of small business owners who extend credit to their customers, 64 percent received delayed payments or requests to delay payments. In April, about the same number of business owners were extending credit to customers, 32 percent, but the number of owners who received delayed payments and requests for extensions was up to 73 percent.

More Poll Highlights:

-- 56 percent of small business owners say that the performance of the stock market rarely or never influences their business investment decisions, while 52 percent said that the stock market does not reflect the daily economic reality they see around them.

-- 58 percent of consumers polled said that the small businesses they patronize charge more for their services when gasoline prices rise.

-- 39 percent of consumers said that they would be willing to pay higher prices for goods and services from small business that use "green" energy practices.

-- 63 percent of consumers think that it not very likely or not likely at all that the economy will improve in the next six months.

The views and opinions expressed by small business owners and consumers who participate in the Small Business Watch survey are their own and do not necessarily reflect those of Discover Financial Services or its affiliates.

About the Small Business Watch

The Discover Small Business Watch is a monthly index measuring the relative economic confidence of U.S. small business owners who employ less than five employees, a segment that consists of 22 million businesses producing more than a trillion dollars in annual receipts. The Watch is based on a national random survey of 1,000 small business owners. It is commissioned by the Discover Business Card, which strives to offer the best business credit card for American small businesses, and is conducted by Rasmussen Reports, LLC ( www.rasmussenreports.com), an independent survey research firm. The numeric index is calculated by assigning values to responses to a set of six consistent questions. The base value of the Watch was established at 100.0 based on surveys conducted in August of 2006. In addition to generating the index, the Small Business Watch surveys small business viewpoints on key business drivers, and also surveys 4,000 consumers to gauge purchasing behavior and attitudes towards small businesses. For past results and small business survey data, visit www.discovercard.com/business/watch. For information on Discover Business Card, visit www.discovercard.com/business.