they agree the recovery has not made itself widely known.

"There is no question the economy has picked up,'' said Mr. Donald Lines, president and chief executive officer of the Bank of Bermuda.

Recent statistics released by Government showed improved numbers in almost all economic sectors, and an increase in visitors of more than 10 percent over last year. And Bermuda's balance of payments improved sharply in the second quarter of 1993.

"In economic terms, we've recovered,'' Mr. Lines said. "In personal terms, the recovery is very spotty.'' The construction industry was "not yet buoyant,'' and the retail sector was "from their point of view probably still in recession''.

The Hon. Sir David Gibbons, chairman of the Bank of Butterfield, said he expected a "restored level of confidence'' due to the outcome of the October 5 general election.

Until investors knew whether the United Bermuda Party would be returned, "a number of projects were frankly put on hold,'' the former Premier said. "I would anticipate that there would be a number of commitments being made in the coming weeks.'' Mr. Lines said elections "have always created uncertainty,'' but he did not sense the pent-up demand that Sir David did.

A new influx of reinsurance companies was also making Sir David bullish.

Several recent announcements should result in vacant office space being filled, he said.

Mr. Lines said the new reinsurance companies could result in some office building construction, depending on how many new employees were hired.

A 10 percent rise in visitor arrivals was also encouraging, though the stalled economic recovery in the United States would keep visitor spending down, Mr.

Lines and Sir David agreed.

In the United States, retail prices were flat or down, Mr. Lines said. There, 40 percent of the retail trade was through franchises, which allowed retailers to negotiate better prices. Franchises were expected to grow to 80 percent of the retail market by the year 2000.

Bermuda was opposed to franchises, but it was increasingly difficult for local retailers to compete, Mr. Lines said. While he did not want to see Bermuda's shops move down market, and franchises would not solve all of local retailers' woes, "franchising should be considered''.

Sir David said that although spending by visitors was poor, "I think there has been a general improvement in sales in locally-oriented businesses, as far as the short term is concerned.'' The lingering recession in the US would keep visitor spending down, Sir David said.

In general, "I'm very optimistic,'' he said. "Bermuda is going to benefit very substantially in the next year or two, but in a somewhat different way than one normally expects coming out of past recessions.'' The Hon. Sir David Gibbons.