Only 18% of U.S. small and mid-sized business owners said they will probably/definitely take out a new loan in 2013, compared to 15% one year ago. More than half (58%) plan to spend on capital investments, the same in the fall but down from 70% a year ago, according to the latest PNC Economic Outlook survey. Technology equipment remains the top priority.

The spring findings of PNC’s biannual survey, which began in 2003, reveals about one in four are highly optimistic about their own company’s prospects during the next six months, up from 23% last fall. Nearly half expect sales to increase during the next six months — on par with the previous 46%.

Their outlook has brightened about the U.S. economy during the next six months as 58% are optimistic and 41% are pessimistic in a turnaround from fall’s 42% and 57%, respectively. Regarding their local economies, 71% are optimistic and 28% are pessimistic — improved from 59% and 39% last fall.

“The powerful engine of the U.S. economy is not firing on all cylinders, but there are sparks of optimism related to sales, profits and housing prices,” said Stuart Hoffman, chief economist at PNC. “These findings support our baseline forecast that the moderate U.S. economic and jobs expansion will persist in 2013.”

Hoffman added that three factors are holding back the economy: Continued uncertainty about federal spending, tax and deficit actions; hiring freezes and ongoing layoffs, particularly at the federal level; and continued limits on U.S. exports to Europe.

For full survey results click here.