turnaround has come from business leaders and bankers.

But Bermuda has been warned to brace for winter lay-offs and shorter working weeks.

And the Progressive Labour Party yesterday accused Government of trying to put a pre-election gloss on the economy. It described talk of an upswing as flying in the face of reality.

A Government economic spokesman also raised fears about overseas buying sprees among Bermudians: "It could jeopardise jobs here.'' The Hon. Dr. David Saul made his cautious forecast as new economic figures touched off a mini wave of optimism.

The quarterly April-June bulletin signalled improvements in tourist spending, prices, and retail sales.

But it also revealed a slowdown in the construction industry, and an 8.6 percent rise in overseas spending.

Dr. Saul expressed hope the Island had reached the bottom of the recession.

"I believe we will continue as we are throughout the winter, and it will be next spring before we see some turnaround.'' Yesterday Chamber of Commerce president Mr. Louis Mowbray backed Dr. Saul, although sprinkling his support with caution.

"I don't think there will be an upturn until next summer, or spring at the earliest,'' he said. "That would assume there is a pick up in the North American economy.'' Mr. Mowbray said Bermuda compared well with other recession-battered countries.

But he voiced concern over low air arrivals, which would continue to plummet with the onset of the off-season.

The number of air arrivals between January and August was 45,000 down on the same period in 1990. This was virtually a 15 percent decrease, and left Bermuda with a lot of catching up.

"The economy is very flat at present,'' warned Mr. Mowbray.

Mr. Mowbray said the winter could see some lay-offs in the retail sector, along with shorter working hours.

Bank of Butterfield chairman the Hon. Sir David Gibbons also aligned himself with Dr. Saul.

Although he had not studied the quarterly statistics, Sir David foresaw a continuing upturn in Bermuda's economy.

"I don't think there will be any significant improvement, however, until next Easter or spring,'' he added.

A Government spokesman for the economy said the quarterly bulletin heralded a glimmer of light.

It was important for Bermuda to capitalise on the weak US dollar, and slashed airfares.

Bermudians should also guard against getting trapped into a "negative mode'' of thinking.

The spokesman picked out the rise in overseas spending as the worst statistic.

"Sooner or later Bermuda has got to appreciate expenditure overseas weakens the ability of the retailer to give the range and variety of goods people want.'' He added: "It also weakens the job security of those in the retail sector.'' The spokesman said overseas buying did not necessarily pay, once duties were thrown into the equation. "I don't think all the costs are properly accounted for.'' The spokesman also voiced anxiety over a shift in the share of the tourism market from large hotels to smaller ones.

Yesterday the PLP scorned Government optimism when major western economies were still in the doldrums.

Britain, for example, predicted it would take three or four years to pull out of recession.

The PLP hit out: "The economy seems to be the major electoral issue with the pending presidential election.

"We can only assume that this Government is attempting to put a good face on the economy as it prepares for an early election call.'' The party highlighted continuing job losses, hotel closures, and business failures.

"For many it will be a bleak Christmas,'' it stated.