announced last night.

But he admitted employment had not yet bounced back to where Government would like it to be.

Dr. Saul based this on information released yesterday from the Cabinet's recession committee which he heads.

"Whereas there is still a fair amount of red ink around, and employment figures are not what we would like them to be, there is certainly clear indication that we are on the road to recovery,'' he said.

An upswing in tourism figures for the past month, full hotels with encouraging projections for this month, and an expected improvement in visitor spending this quarter were all indications that Bermuda was coming out of the recession, Dr. Saul said.

Tourism figures for May were the best since 1987.

He also noted that international business was showing signs of steady improvement and retail sales figures were also showing an upward trend.

Another encouraging indicator, he said, was the number of people who sought advice from the Small Business Development Corporation.

Of 99 clients between January and March, there is a possibility of 44 small businesses starting up, with a potential of as many as 250 new job opportunities.

"Employment,'' Dr. Saul noted, "was the key to bringing Bermuda completely out of the recession, and the only disappointing area remained the construction industry.'' Planning figures showed that although 139 building permits were issued between March and May, there was no major construction activity during that period.

"If we can stimulate the construction industry,'' Dr. Saul said, "the entire employment picture will brighten.

"I think we can safely say that at the moment, the recession is over, but unemployment is not.

"However, as the economy improves there is every probability that construction will follow.'' Dr. Saul also said he was encouraged by the results of initiatives launched by the cabinet committee.

One of those initiatives he said was the Works and Engineering programme whereby some 72 people -- who could not find a job, were hired at $8 an hour instead of going on social assistance.

"This scheme has met with very good success and has been extended into the summer,'' Dr. Saul said, adding that social assistance was a "safety net'' in difficult times and he was pleased to see the number of social assistance recipients and new applicants levelling off.

The committee, which was formed in September, 1991 to monitor the economy, will continue to meet until it has stabilised. PHOTO The Hon. David Saul.