Finance Minister Eugene Cox yesterday gave a sneak preview of statistical figures, about to be released soon, which show Bermuda's overall economy is generally in strong shape but is being pulled down by a stagnating tourism sector.

Preliminary third quarter figures, due to be officially released next week, show the tourism sector continuing to struggle during the year.

"Foreign exchange earnings from tourism have stagnated and visitor arrivals at the airport have continued to decline, even from the depressed level of 1997,'' Mr. Cox told Chamber of Commerce members in a speech yesterday.

He said visitor arrivals fell 2.25 percent during the nine months to the end of September, while air arrivals from the US were 3.68 percent below the same period in 1997.

"This is a continuation of the experience in 1997 that recorded a decline of 2.6 percent in air arrivals from all sources for the full year,'' he said.

However, there were some positive signs. The number of bed nights fell only marginally as visitors average length of stay increased. Tourism revenues were also propped up by an increase of 6,500 more cruise ship passengers arriving in the first nine months of the year compared to the same period in 1997.

"However, the higher number of cruise passengers were not enough to offset the decline in tourists that arrived by air and the overall number of visitors fell in the first three quarters of 1998 by 1.26 percent,'' he said.

Total expenditures increased marginally, but by less than the two percent rate of inflation in the first nine months.

Meanwhile, the construction sector continues to help drive the economy. The Statistics Department estimated that during the first nine months of 1998 $93.5 million worth of work was put in place by the construction industry.

During the first nine months $82.2 million worth of new projects were started.

The amount of income earned by those working in the construction sector increased 12.2 percent in the first half of 1998 to $44.7 million.

Mr. Cox reported that residential construction regained strength in the first nine months during which 157 units were completed, compared to 146 units completed in 1997.

"The increase in construction of residential units reverses a trend of declining residential construction that has persisted throughout the 1990s,'' he said.

Retail sales continued to surge during the year, averaging five percent real growth over the first nine months.

"The strength in retail sales reflects the growing economy, greater employment income, consumer confidence and domestic retailers' efforts to capture more sales in the face of intense competition from overseas stores,'' he said.

Preliminary figures for 1997 show the number of jobs in Bermuda increased during the year by 660 to 35,296 employed. Mr. Cox said the figure represents the largest increase in employment since 1994.

The international company sector had the strongest growth in employment, followed by construction, restaurants and bars. Hotel employment fell by 90 jobs.

The annual Archer report on international companies shows that the sector continued its strong growth. International companies spent $743.3 million in Bermuda during 1997, an increase of $112 million or 17.7 percent over 1996.

International companies spent $340.5 million on salaries and benefits, $159.4 million in professional and bank fees, $186.7 million for goods and services and $56.6 million in taxes.

The number of international companies with a physical presence on the Island increased by 26 to a total of 327 at the end of 1997. In 1997 international companies hired 2,667 employees, of which 57 percent were Bermudians.

Overall international companies provided 7.6 percent of all jobs in Bermuda and 5.61 percent of all jobs held by Bermudians.

Preliminary figures for 1998 indicate international company sector growth is continuing. There were 11,145 international businesses on the register at the end of September, 1998, up by 702 from the end of December 1997.

The number of collective investment schemes registered in Bermuda grew 13 percent year-over-year to 1,068 registered at the end of June.

EUGENE COX -- Finance Minister gave preview of statistical figures.