More than two out of three California small business owners expect growth this year to top 2004 and nearly 36 percent plan to hire new employees, according to a statewide survey released Tuesday by Union Bank of California.

Despite their generally optimistic outlooks, nearly 66 percent of small business owners surveyed cited the high cost of workers’ compensation insurance as one of their three chief concerns. The other two concerns were the state’s economy and the cost of providing health care benefits.

Respondents said the main advantages of owning a business in California included opportunities for growth (29 percent), family ties (20 percent) and the climate (18 percent).

Nearly two-thirds of those surveyed reported higher sales in the fourth quarter over the like period a year earlier, with 23 percent reporting same sales and 14 percent lower sales. In addition, 42 percent have capital expenditure plans for this year.

For this survey, Union Bank polled more than 1,900 small business owners statewide. Small businesses were defined as California companies in operation for at least two years, with annual sales under $5 million for the fiscal year 2004.