tills, according to the latest Government statistics.

Spending in the retail sector went up 2.1 per cent on gross turnover for the third quarter of 1996 compared to the third quarter in the previous year.

All sectors of the retail market showed increases, with the biggest being in motor vehicles and service stations, up 7.5 per cent.

Last night Finance Minister Grant Gibbons said: "I think the economy is looking quite promising.

"That's not to say we don't have challenges in certain sectors -- retailing to some degree and tourism -- but generally things look quite positive. It's promising.'' Spending on food went up by 1.6 per cent, followed by a 1 per cent increase in alcohol sales, while spending in other stores went up by 0.8 per cent.

But Bermudians buying abroad also spent more -- declaring goods worth an estimated $7.4 million, up 2.3 per cent on summer 1995.

The biggest draw abroad for residents were tools, machinery and parts, up a staggering 44.5 per cent on the same quarter in the previous year.

Hi-tech computer supplies also showed a big increase, with a massive 16.1 per cent increase in spending on hardware and software.

Compact discs, tapes and records were also a big hit with residents coming in from abroad -- spending in this area went up 5 per cent on the previous year.

Toys and sports goods were not far behind, with a 4.6 per cent increase on June to August 1995.

And there was a ray of hope for the beleaguered tourism industry as both arrivals and spending went up in the peak summer months of 1996 compared to 1995 -- although visitors appeared to be spending less.

There were a total of 124,575 air arrivals, 5.3 per cent up on summer 1995, and they spent nearly $148 million, although the cash visitors left behind was only a 1 per cent increase on the previous quarter.

But the Government's Quarterly Bulletin of Statistics admits that the previous summer's arrival figures were badly affected by hurricane weather.

Cruise ship arrivals also increased, by 8.6 per cent year-over-year, giving a total of almost 88,000 visitors -- but they spent far less than air arrivals.

Cruise ship went up, by 12.8 per cent -- but to a relatively small $21.2 million compared with air arrivals.

A total of 4321 people were employed in the hotel industry at the end of July, 2.6 per cent up on the corresponding period in 1995.

But employment in smaller properties like guest houses fell, although major hotels showed a 2.6 per cent increase in staffing while cottage colonies and housekeeping establishments showed the biggest increase in employees, up 3.8 per cent.

In the business world, an increase of 25 in the number of international business start-ups -- a total of 260 in the quarter -- was not matched by local firms.

There were 42 new local companies formed, down by three on the third quarter of 1995.

But existing businesses in the construction sector did well, with major new projects worth a total of $27.6 million starting between July and September.

And construction spending by both Government and private developers was up more than three times the spending in the third quarter of '95, standing at $22.3 million.

Private sector construction accounted for more than 60 per cent of activity in the building sector. The increase in the public sector was partly due due to work on the new Cedarbridge Academy.

But housebuilding registered a dramatic drop with 47 new homes being built in the period -- down 17 on the third quarter of 1995.