Monday’s story on the retail sales index and the recent report on the first quarter’s tourism arrivals indicate that Bermuda may be beginning to recover from the economic effects of September 11 and the global recession.

For the first time in a year, retail sales rose by 1.1 percent in March compared to the same month last year, after taking inflation into account.

And tourism arrivals for the first three months also rose by 2.6 percent.

Those figures demonstrate the resilience of the Bermuda economy. But it should be noted in both cases that the growth is uneven, and far from guaranteed.

Retail sales for March rose in spite of the fact that there were two fewer shopping days, but much of the growth came from alcohol, pharmaceutical and food sales.

Broader retail sectors saw little growth or suffered declines and what growth there was may have been due to sales of excess inventory.

Until growth occurs in more sectors at the same time, there is not much to cheer about.

One exception is the reduction in purchases by residents returning from abroad. That trend has been broadly true since September 11 and may reflect the continued strength of the Buy Bermuda campaign and the fact that people are still being quite cautious about travelling and spending abroad. Still, it is to be hoped that it will continue for some time.

It should not be taken for granted however. As with tourism, retailers must find ways to draw consumers, both residents and visitors, into their shops by offering merchandise that is both diverse and price competitive.

Government missed the opportunity to give retailers a better chance to cut costs by not reducing Customs duty in the February Budget, but still can do something next year. While the extension of the payroll tax exemption must help to some extent, more radical thinking on taxes is needed to restore the Island’s competitive edge.

That kind of thinking has been evident in the hotel industry where the Hotel Concessions Act has enabled many properties to upgrade the physical plant and facilities.

How much of the improvement in tourism arrivals in the first quarter is due to the concessions is hard to determine.

But it does seem to be paying off for some of the larger hotels, including both Fairmont Princess properties, which have been reporting strong bookings since the beginning of the year.

It would appear that much of this is due to strong group and convention bookings, which are an essential part of the tourism mix.

Tourism Minister David Allen also reported this month that arrivals from the UK and Europe are up — and that too is important. European visitors tend to stay on the Island longer than North Americans, meaning they spend more. Put another away, one visitor who comes for two nights is as valuable as two visitors who come for one night each.

That said, it is worrying that there has been little sign of recovery from the East Coast or Canada. These markets remain the Island’s most important and it would take extraordinary increases in European visitors in the summer months to make up for a shortfall.

It should be noted that the tourism increases are being measured against the first quarter of 2001, which was pretty unimpressive.

While the first few months of this year have shown improvement, it is still far too early to claim that Bermuda has turned the corner.