The Dow is teetering around 10,000. Tech stocks are hurting. But entrepreneurs -- those cockeyed optimists -- are more bullish than they've been in at least a year, according to PricewaterhouseCoopers' latest survey of fast-growing small companies.

Small wonder. Another fresh survey, by Duke University's Fuqua School of Business and the Financial Executives Institute, shows small companies (those with sales of less than $100 million) expect their earnings will grow by 17.4% this year. In contrast, large companies foresee their earnings rising by 14%. The Duke study polled 131 small companies and 240 large ones in the week of Mar. 15.

More than three-quarters of the chief execs PWC surveyed say they're optimistic about 1999 in the light of economic conditions and their financial results from the last quarter of 1998. Only 5% are pessimistic, and 18% are uncertain. Small-business optimism made a big comeback after the third quarter of 1998, when only 43% were optimistic about the coming 12 months, and 44% were uncertain. The CEOs haven't been this positive since the fourth quarter of 1997, when 73% were optimistic about the coming 12 months.

PWC surveyed 451 executives of companies with revenues from $1 million to $50 million -- half of them in high tech -- from late January to mid-February.

SPENDING SURGE. The implications for the economy as a whole are positive. Both surveys show small businesses clearly plan to contribute their bit to growth. According to PWC, 55% are planning capital investments. They're also investing more -- 13.2% of revenues, vs. 11.3% in the third quarter of 1998 and 12.5% a year ago. What are small-biz owners buying? Computer equipment, of course.

That correlates with the Duke survey, which indicates that small companies plan to boost their capital spending by 13.2% in 1999. What's more, they're exploiting the Net more than large companies are. Small ventures expect the Net to generate 4.3% of their sales in 2000, up from 1.7% in 1998. Large businesses expect their Net sales share to jump to 3.8%, from 1% over the same period.

If you're hiring, there's little relief in sight. The companies' exuberance suggests that the job market will remain tight -- especially in the high-tech sector. Eighty percent of the PWC respondents will be adding staff. The percentage hiring has held fairly steady, ranging from 78% to 81%, since the beginning of 1998.

Clouds on the horizon? In line with U.S. jobs data, wage pressures and hiring problems are the main concern, with almost 63% in the PWC survey fretting over the lack of trained workers. That's down from nearly 70% a year ago, but still high.

All this bullishness adds up to a prediction from the companies PWC polled: The U.S. economy will grow 3.07% for the next 12 months. That's a jump from their view late last year, when they foresaw the U.S. economy expanding by 2.55%. And in their own sectors, these entrepreneurs are predicting 11.05% growth, up from expectations of 10.1% a year ago.

Even the old small-business bugaboo of pesky regulations seems to be less of a problem under the circumstances: Only 30% say that's a significant hindrance to growth, compared with 37% in the beginning of 1998.

By Julia Lichtblau in New York
Julia_lichtblau@businessweek.com