The nation's small-business owners are cutting back on hiring and spending plans amid weaker sales and a bleaker outlook on business conditions, the National Federation of Independent Business reported Tuesday.

Last month, the Washington-based lobby group's monthly small-business optimism index dropped to a 28-year low. Eight of ten index components declined in March, including plans to increase employment and real sales expectations. The index is based on a survey of more than 700 small-business owners nationwide.

Only 20 percent of owners surveyed said they expected to create new jobs over the next three months, down one percent from February, while seven percent were planning layoffs. Just 25 percent were planning capital outlays.

"We are seeing recession readings," William Dunkelberg, the group's chief economist, said in a statement.

Despite the downturn, owners reported having no trouble accessing capital or credit. Only two percent cited credit availability as their top business problem, compared to a record-high 37 percent in 1982, the group reported.