A strong decline in the rate of sales growth for building materials is raising questions over whether the Island's building boom may be slowing.

Sales figures revealed yesterday in Government's Retail Sales Index showed flat growth for the sector, a development during a month that also saw a decline in the overall value of local sales coupled with overseas spending seeing the strongest jump so far this year.

The net effect of October's results could be a warning bell for retailers with Chamber of Commerce president Charles Gosling saying the decline in building goods was the most alarming development.

October's numbers are, however, in comparison to a year ago when total sales jumped 13.9 percent. That strong growth ? the largest increase since September 1999 ? followed the Island's devastation by Hurricane Fabian in September which led to high consumer spending as people repaired and replaced damaged property.

This year, the retail sector saw sales levels fall off 1.9 percent after being adjusted for the 3.7 percent rate of inflation posted in October.

During the month, building supply firms posted a slim year-on-year increase of 1.7 percent to $168.2 million, which compares negatively, with two exceptions, double-digit growth for the past year.

At the same time, returning residents declared nearly $1.5 million more in purchases abroad than they did in October of last year ? a 46.5 percent jump.

Mr. Gosling said: "After an outrageous year or two in growth of building materials, you have to ask whether this is a sign of slowing down."

He cautioned, however, that the decline in growth for the building supply sector could either be a "statistical blip or a sign of slowing".

It was a situation that Mr. Gosling said should be watched closely because the boom in the building market has had a positive knock-on effect for some other retail sectors. "If this is due to a slow down, we need to do what we can to help minimise any inflationary factor and the negative effect it would have on the rest of the economy," Mr. Gosling said.

During 2004 strong activity in the building sector has pushed sales as high as $196.3 million during one month alone ? a sales record hit in March, when 38.4 percent growth for building materials sales was posted.

The two months in the last year that fell short of double digit growth still saw stronger activity than October's slump ? the weakest growth rate since July, 2003. In April, growth in building supply sales stood at 3.1 percent and growth for the month of July stood at seven percent. On the overseas spending front, declared purchases increased by a whopping 46.5 percent in October marking the strongest jump in returning resident declarations this year. In total, residents declared $4.54 million in purchases abroad during the month, in marked comparison to $3.1 million a year ago.

But Mr. Gosling said the increase in overseas purchases being declared could be more a case of "not so much a spending jump, but a year of higher diligence by Customs".

Locally, consumer spending increased a marginal 1.7 percent ? or declined 1.9 percent after inflation adjustments ? making it the weakest sales gain in 14 months.

As for the rest of the year, Mr. Gosling said: "I am hearing (from retailers) that it is a good Christmas period," and he said that retailers had been "vocally supportive" of the impact of the Chamber's 'Buy Bermuda' campaign.

Anecdotally, Mr. Gosling said he had been shopping in one of the Island's smaller niche stores recently and business appeared to be booming: "There were lots of customers there," he said of the speciality shop that sells items difficult to source elsewhere.

Mr. Gosling, who is also vice-president, marketing for liquor company Gosling's, said his firm had also fared well in the past year.

"We have been through a year of very good business. We have also found that we have been able to upgrade the choice for the consumer ? a move that has been well-accepted. We think there is a bright future, if we can upgrade the product we offer and services."