It could be argued that the generally flat performance of the economy in the second quarter is nothing to be sneezed at, given the aftermath of the September 11 terrorism attacks and the general global economic downturn.

Indeed, given the deep concerns in the wake of the attacks and the predictions by the Government that the Island was facing a two-quarter recession, the statistics reported on in today's Business section could have been a good deal worse.

But there are several areas of the economy that are worrying aside from tourism, which has now been on life support for years and shows little sign of meaningful recovery.

One is construction. The number of homes completed in the second quarter is substantially down on the previous year, while construction activity in the first three months of this year was also down.

For some reason, second quarter figures for construction starts and the amount of work put in place are unavailable, but looking around the Island, there are more projects nearing completion than there are breaking ground, suggesting that the construction boom is cooling off.

That is important because construction to a very great extent has kept the local economy growing over the last year to 18 months as tourism has plummeted. If construction slows down and tourism does not recover, the economy may continue to struggle with those in blue collar jobs likely to feel the worst effects.

In the last recession, international business kept the economy growing as tourism suffered.

The messages here are a little more mixed. The decline in company registrations over the last two years suggests that the Island is less attractive to international companies than it was.

Against that, it needs to be recalled that a great many "new economy" companies formed on the Island when electronic commerce was going to be the third leg of the economy.

The global recession and the end of the Internet bubble would naturally lead to a decline in company registrations.

In addition, the controversy over corporate inversions and tax havens can do the Island no good, even if, as Association of Bermuda International Companies chairman David Ezekiel states, it seems to have done little harm yet.

Still, the overall picture is not great, even if the economy has been a good deal more resilient than one might have expected 12 months ago.

The major concern now is what effect a downturn in construction and a general slowdown in international business might have on the Island.