Confidence among Hawai'i business owners remains high, but is leveling off as energy and housing costs continue to climb, according to a Bank of Hawaii survey released yesterday.

Fully 51.7 percent of 305 businesses surveyed during February expected higher levels of economic activity during the next year, while 8.8 percent expected slower economic activity. That compares with an August survey in which 56.2 percent of respondents expected higher performance and 7.4 percent expected lower performance.

"Current high levels of confidence are just below the all-time highs of the late 1980s, but have persisted at these high levels for much longer than during that previous experience," said Bank of Hawaii's Chief Economist Paul Brewbaker. "There is a leveling off of confidence levels likely brought on by energy and housing costs and a tight labor market."

The state's economy is benefiting from accelerating construction and stronger tourism that has helped to boost employment while slicing the jobless rate to the lowest level in the nation. The most recent peak in business confidence was in August 2004 when 60.6 percent of those surveyed reported a positive outlook on the economy.

Mark Hollander, president and chief executive of Hawai'i retailer Crazy Shirts, said the company maintains a bullish outlook for Hawai'i's economy.

"I would say that we echo the positive sentiment. We're very optimistic," he said.

Like other employers, Crazy Shirts, which has 37 stores in Hawai'i, California, Nevada, Florida and Guam, is having to cope with a tight labor market, which can make it challenging to fill job openings.

"The labor market is definitely tight, but I don't see how that could be seen as anything but a good thing," Hollander said. "The best people have always been in demand. We've had to put a lot more emphasis on our training programs, so we're able to cope with that, that way."

Overall the survey suggests continued optimism among businesses in terms of business investment and profits. At the same time, businesses were more reserved about the pros-pects for hiring additional workers.

The survey showed 24.7 percent of respondents forecasting adding jobs during the next year while 9.3 percent expected lower employment levels. Some 61.2 percent of businesses expected employment to remain the same.

The survey has a margin of error of plus or minus 5.6 percentage points.

Reach Sean Hao at shao@honoluluadvertiser.com.