NEWTON, MASS. – Many small companies aren't letting the volatile economy get them down. A recent study by Thomas Regional and MasterCard found that industrial small businesses are optimistic about two issues: business growth and e-commerce.

The study found that 75 percent of small industrial companies — manufacturers, distributors, service companies and their suppliers — expect their business to grow in the coming year, with one out of three expecting significant growth.

A record 5,000 businesses responded to the Industrial Small Business Outlook, which revealed the importance of the Internet and other technologies in helping small companies perform well. Small firms are using the Internet to reach out to new customers beyond their geographical territories, for one. Secondly, small companies say the use of payment cards — credit, debit and prepaid purchasing cards — is helping them better manage cash flow and operations, the study claims.

Twenty-nine percent of respondents sell online and 40 percent of those are selling more online now than they did last year. Over half of the companies selling more online attribute the growth to their ability to expand into new markets, the study showed.

The trend is also working in reverse. Eighty percent of respondents said they buy products and services online. In addition, 40 percent of those who buy online for their businesses say they are buying more this year, and 44 percent expect to buy more online in the coming year. Respondents said the process saves time and money, and is easier than ordering by traditional methods.

Despite the ease of buying online, 79 percent of respondents said they sometimes choose to conclude their purchases offline.

Another factor helping the bottom line is the acceptance of payment cards. Credit, debit and prepaid purchasing cards are replacing conventional payment methods, such as purchase orders and paper checks, for some companies. Respondents said the cards help them better manage receivables, check customer credit and improve cash flow — critical factors in the difficult economy.

And the economy does, indeed, remain a challenge. The Institute for Supply Management's October Report on Business® showed that while new orders are growing in the manufacturing sector, production is contracting, supplier deliveries are slowing and employment and inventories are on the decline.

ISM's PMI was 48.5 in October, down one percentage point from September, indicating that the manufacturing economy failed to grow in October for the second consecutive month. A PMI reading above 50 indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.