PHOENIX -- A large number of Arizona small businesses say they are making less money now than they did a year ago.

The findings in a new survey by O'Neil Associates comes despite the fact that the number of businesses that say their revenues are higher than a year earlier is equal to the number who report the reverse. A similar pattern emerges when the businesses are asked about expenses.

But Michael O'Neil who conducted the survey for the Arizona Small Business Association, said the figures are not inconsistent.

He said the question asked only a relative change in expenses, revenues and profits. O'Neil said it is likely that the decline in revenues is much sharper for those who report a drop, compared with firms that say income is higher.

Similarly, he said, the fact that an equal number of firms reported higher expenses as said spending is down does not account for how much the change was for each one. That, O'Neil said, yields the net result of 45 percent of businesses saying profits have slid.

O'Neil also found that 29 percent of businesses reported their profits staying about the same in the last year, with 26 percent saying they actually had increased their earnings.

He noted the number of firms that reported decreased profits has increased during the past three quarters he has conducted the survey. O'Neil called that a "fairly typical pattern'' in a declining economy.

According to O'Neil, firms were probably able to maintain their profits at the front edge of a downturn by trimming their expenses.

"As the economic situation deteriorates further, however, there is a limit to how much expenditures can be cut,'' he said. And that, O'Neil said, translates into declining profits.

The survey was sent to 3,000 small businesses throughout the state, with 200 of these returned. It has a margin of error of 6 percent.