About 52 percent of respondents expect an economic decline this year, while about 48 percent expect the economy will stay the same or improve, according to the findings of a Bank of Hawaii report released today.

The survey results reflect the post-Sept. 11 economic shock, which has led to a dramatic decline in tourism, an apparent local and national recession, corporate losses, and thousands of layoffs.

While the Hawai'i economy is proving somewhat more resilient than initially expected, Bank of Hawaii economist Paul Brewbaker said, the survey shows that business' confidence is sagging, which could have a dampening effect on future hiring, capital investments and development.

"The bottom line is that we are seeing a shift from a more neutral expectation a year ago to a slightly less positive outlook," Brewbaker said. "...The recent survey results reflect another dip ­ similar to what we observed during the 1990s stagnation ­ when, just at the point business confidence was weakest, economic activity began to improve."

Brewbaker said last year's better-than-expected domestic visitor arrivals to the islands and an annual increase in visitors from California are signs of "Hawai'i's true resilience."

The January mail-in survey included responses from 425 businesses from all islands and many industries, but the responses are skewed toward businesses in particular sectors. More than 40 percent of responses came from retailers and professional service firms; hotels made up 2.6 percent.

Still, about one-third, or 33 percent, said they expect higher sales in the next 12 months, while only 30 percent expect lower sales.

The seeming contradiction is explained by business owners' tendency to be more optimistic about their own prospects than about those of the overall economy, Brewbaker said.