WASHINGTON - THE credit crunch gripping global markets, high energy prices, inflation and fears of recession have stoked business owners' pessimism to a record high, a survey showed on Thursday.

The availability of credit - the lifeblood of companies' operations, payrolls, and investment - is among the biggest headaches for owners of small and medium-sized firms, according to a twice-yearly survey by The PNC Financial Services Group (PNC).

Despite healthy second-quarter economic growth and tens of billions of dollars in tax rebates, 'pessimism among the nation's small and mid-sized business owners is at a new all-time' since 2003, when the economic outlook survey was launched, PNC said.

PNC said the survey results supported its forecast for the remainder of 2008 that shows the US economy 'remaining stuck in a recession that lurks just below the shiny surface' of the government's estimate of second-quarter per cent annualized growth of 2.8 per cent.

'Consistent with reports of credit market tightening, owners indicate it is more difficult to obtain credit,' PNC said.

Twenty-five per cent, or one in four owners, said it was more difficult now than it was three months ago, up sharply from 18 per cent in the spring survey.

Seven per cent said it was easier to get credit, half the number than in the prior survey.

The latest nationwide survey of some 1,000 business owners or senior decision makers was conducted between late July and mid August.

A year earlier the US subprime crisis, stemming from the collapse of a housing boom, erupted onto global markets, setting off a credit crunch that is threatening to collapse the US economy.

PNC said that nearly one in three (29 per cent) of those surveyed were pessimistic about their own company's prospects during the next six months, compared with 21 per cent six months ago.

In the year-ago survey, 10 per cent felt that way, PNC said.

74 per cent said they foresaw the possibility of higher energy prices having a negative effect on their company during the next six months.

The spectre of recession was the second-biggest worry, with 71 per cent concerned, and the possibility of inflation was third (65 per cent).

'These results support our view that the US economy has entered into a recession and the economy is likely to remain weak through the middle of next year and beyond if the federal economic stabilisation plan is not enacted,' said Mr Stuart Hoffman, chief economist for PNC. -- AFP