Compared with 64 percent this time last year, 60 percent of businesses polled by the National Small Business Association are confident about the future of their business. The association's 2012 mid-year economic report shows that about half as many small business owners anticipate economic expansion in the coming year than six months ago, down from 22 percent to 11 percent today.

“While the dip in outlook is in-line with cyclical drops in optimism mid-year, there’s more to it,” stated NSBA President and CEO Todd McCracken. “The constant barrage of negative campaigning and near-complete failure of Washington to govern is having a broad, negative effect on America’s small businesses.”

The three biggest challenges named by small businesses were economic uncertainty, declines in customer spending and regulatory burdens.

About 48 percent of those polled believe the economy is worse off now than it was one year ago, a small increase from 52 percent last year. A whopping 68 percent said the economy was better off five years ago. Thinking about the future, 55 percent of businesses expected to see a flat economy over the next year, with 34 percent expecting a recession and 11 percent anticipating an expansion.

That doom and gloom attitude also has small business owners expecting to stay stagnant. Today, 55 percent of owners are growing, or expecting to expand in the coming year, the lowest this indicator has been in three years.

To see the full report, visit the NSBA website.