to July last year, an indication perhaps that brighter days are ahead for Bermuda's troubled retail sector.

In July 1997 consumers spent $2.5 million more -- for a gross total of $50.7 million-- than in July 1996. That's an increase of 5.1 percent. After adjusting for a year-over-year inflation rate of two percent in July, consumers spent 3.1 percent more in real terms in July.

The increase was the highest recorded for the past 12 months.

A Ministry of Finance spokesman said the spending surge was an encouraging sign the work gone into getting the retail sector to restructure and focus more on customer satisfaction was beginning to pay off.

However he cautioned it was still to early to tell if the increase in retail sales was a trend or simply a statistical blip.

"It's hard to tell if the improvement is an indication of a trend,'' he said.

"The statistics show a strengthening domestic demand. We are looking forward to see if this increase is a trend.'' However residents returning from trips abroad declared goods valued at $2.03 million in July, an 11.9 percent increase over July last year, a worrying trend for the local retail sector.

Leading the surge in retail sales on the Island was the motor vehicle dealers and service station sector. Sales increased by 6.7 percent in real terms in July 1997 compared with July 1996.

Sales in the general stores category increased 6.6 percent year-over-year. In the general stores category clothing and footwear stores had an increased demand, while furniture, hardware and music sales were up "sharply'', according to the Statistics Department. "In spite of the 3.1 percent decline in tourist arrivals for July, stores that cater to this market recorded modest gains,'' a press release stated.

Meanwhile food sales declined by 1.5 percent in real terms, while liquor stores recorded a 6.2 percent decline.

The Statistics Department estimates the total value of retail sales for the first seven months of the year was $292.9 million, an increase of 0.5 percent in real terms over the $285.8 million in the same period last year.

Canadian Ron Holberton is the new economic advisor in the Ministry of Finance.

He replaces Andrew Sykes, who has returned to the UK. A native of Calgary, Alberta, Mr. Holberton worked for six years in the international trade and finance section of Canada's Ministry of Finance. He holds a Master of Economics degree from the University of Calgary.

GOVERNMENT GVT