The Small Business Optimism Index continues its 10-month string of ?high? ratings says National Federation of Independent Business, publisher of the survey. Although slipping about three points from January levels, the February rating settled at 102.6. Since August 2003, the index has been above the 100 level.

The index is based on eight components that include such items as ?Plan to Increase Employment,? ?Expect Economy to Improve,? and ?Current Job Openings.? Three of the eight areas showed and increase compared to January.

Although slippage occurred from January to February in key areas such as employment and expectations of increasing capital outlay, most experts agree that the blistering pace of the last two months would be hard to match. Much of the gains are attributed to the 6.1 percent increase in GDP in the second half of 2003 as a result of the Bush tax cuts.

Other positive factors include a possible drop in labor costs. In February, 20 percent of those surveyed confirmed that compensation increases for employees was easing, and those planning to increase pay for workers fell a point to 4 percent. All is not bleak for the labor force though, as 46% of the 587 small businesses surveyed said they were looking for employees, down slightly from 51 percent in January.

Credit conditions remain favorable for growth among the nation?s small biz owners. In February, only a net 3 percent said it was harder to get a loan, slightly above January figures. More than one third said they were able to get their credit needs met, while only 8 percent reported having difficulty.

The strengthening economy is also allowing small businesses avoid cutting prices to attract customers. 43 percent of wholesalers raised average selling prices. Although, some experts are concerned that inflation pressure might continue to affect small business? bottom line.