should give people concern about the state of the economy.

Making a success of a restaurant is among the hardest things in the world to do. Outside of Bermuda, the success rate tends to be quite low and the same is often true, where high running costs are a fact of life.

But Chit Chat owner Marico Thomas made two points in today's paper that should give people reason to worry about where Bermuda is going.

He said one of the major problems he has had has been the difficulty in finding and keeping good staff. He said few Bermudians are interested in working in the hospitality industry and those who are, are in such demand that they push the cost of labour even further up.

The tightness of the labour market seems to fly in the face of warnings from at least two chief executives of local companies, who have warned that the local economy is likely to slow down this year.

If Bermuda's economy is weakening, how is it that employers are having difficulty getting staff to the extent that it puts them out of business? The answer may be that Bermuda, because of its high operating costs and tight labour market, charges prices that its customers cannot afford. Therefore, while the economy may be hot at the moment, it is hard for businesses to remain profitable. Profit margins, by necessity, are narrow and that means that any decline in sales turns profits into losses. This seems to be the problem that Chit Chat faced, and it would not be surprising if other companies face the same problem in the remainder of this year.

Economies go through shake-outs and not every business deserves to survive.

But because Bermuda's tourism sector seems likely to remain flat this year or show relatively small growth, and international business -- in spite of the encouraging growth in new registrations last year -- seems likely to remain flat, the Island is particularly vulnerable.

As the current construction boom slows down, as it inevitably must, the problems will grow.

The fact that the heads of two major local companies -- Masters Ltd. and BF&M -- are all warning of tough times ahead, may compound the problem. If they reflect the consensus, then it can be assumed that many businesses will be looking to restrict new hiring and spending. This is prudent business practice, but will also tend to compound the problem by slowing the economy further.

It should be remembered that in the last recession, as tourism slumped, international business continued to expand, thus cushioning the impact. There are no guarantees that the same thing will happen this time.