construction industry over the last few recession-hit years. Employment in the sector fell by 37 percent from 2,917 in 1989 to 1,832 in 1992, creating widespread financial hardship. Recently, however, there have been signs of a construction recovery. But, as our profile of the industry reveals, the foundations for optimism could be as fragile as a house of cards.

Contractors are not being fooled by recent talk of major new construction projects on the Island. As the Ritz Carlton fiasco proved, it's one thing to talk about building the Bermuda Underwater Exploration Institute or redeveloping the Bermudiana Hotel, but quite another actually getting approval and financing.

Bermuda's construction companies and building suppliers have gone through too much turmoil over the last few years to get elated about a few planned developments -- particularly when they are as controversial as the above.

As Mr. David Exell, president of the Construction Association of Bermuda and managing director of Atlantic Engineering, said: "People have got excited about developments before only for them not to get off the ground. It remains to be seen what happens with these new ventures.'' He added: "The industry's picking up slightly now but I don't believe that any of the companies are anywhere near the employment levels they were at a couple of years ago.

"My company is still down 35 percent on its overall volume of sales per annum compared with what it was two years ago. That's pretty much the same throughout the industry.'' Although he believed that businessmen may be "more comfortable'' following the success of the United Bermuda Party in the October General Election, he said: "There are no indicators at the present time that the situation will significantly improve.

"Burland's haven't got much work on, D&J are finishing up the Bank of Bermuda and Sealand is finishing off the prison. There's still a long way to go yet.'' Recently-released Government figures for construction projects valued at $500,000 or more back up his concerns for the future of the industry.

The statistics show that projects worth just $9.7 million have been started in the first nine months of 1993, compared with $36.2 million during the whole of 1992 and $107.8 for 1991.

Even more revealing was the fact that no new major projects were started in the third quarter of 1993.

Despite 1,832 job losses in the sector between 1989 and 1992, Mr. Exell said: "The people who are worth their salt in the construction industry are probably still employed, but I don't envision any great increase in construction labour force in the immediate future.'' Mr.

Alan Burland, whose firm of Burland, Conyers & Marirea appears to have suffered the effects of the recession more than most, said there were signs of a recovery.

"More buildings are being put up and there are more major projects out there looking promising,'' said Mr. Burland, who is chairman of the construction division of Bermuda Chamber of Commerce.

"However, until some of these larger jobs actively move ahead, it remains to be seen just how much of a recovery we will see.'' Ironically, the start-up of too many large projects is likely to cause as many problems as the commencement of too few.

Some contractors we spoke to said strenuous efforts must be made to avoid a repetition of the overdevelopment during the 1980s when too much construction pushed up inflation and led to problems with the Island's economy.

"I would express a little nervousness that if everything that's on the board comes out we could have inflation rate problems,'' said Mr. Burland.

"If a few of these macro jobs go ahead at the same time, it could saturate the industry.'' Mr. Andrew Cooper, a director of Sealand Construction, said it was too early to start worrying about overdevelopment.

"The industry is in a very, very poor state at the moment,'' he said. "We're hanging on by the skin of our teeth basically.

"One always likes to be optimistic, which is why we are hanging in there.

There's an awful lot of talk about various projects but nothing concrete as yet.'' Although there were concerns about too many projects happening at the same time, he said: "We're contractors. We want to build things.

"Just as a Front Street merchant wants to see tourists on the Island, we obviously want to see some construction. That's not to say we want to build anything anyhow anywhere, but building is our livelihood.'' He added: "Right now we're a little optimistic that the recession has bottomed out but it will take a while for the construction industry to benefit. We always lag behind the general economy as regards enjoying upturns or enduring down-swings.'' Mr. Mike Gringley, owner of Gringley Construction, which is the main sub-contractor of the Tynes Bay incinerator, said: "Fears about overdevelopment, like we had in the 1980s, are not as bad as people make out.

"You don't have that many jobs around at the moment, particularly with the prison finishing and Tynes Bay ending in April. No big projects that I know of are due to be started in the near future.

"You will not see much happening in the New Year although it could pick up later. Right now, the picture is pretty grim. All you have is a lot of projects being talked about and none actually happening.'' Reiterating Mr. Burland's concerns, he added: "If all the projects come on line as they are saying then you're going to see the same problems that there were in the 1980s.'' Government could better regulate the industry so that projects were staggered, said Mr. Gringley, who added: "There's the possibility of problems towards the end of next year.

"I know it's difficult because you can't stop free enterprise and the desire to invest and put buildings up but there needs to be more structure as far as new developments are concerned.'' Directly proportional to the fate of contractors is the fate of companies who supply them with their materials, aggregates and other products.

Mr. Kevin Chambers, controller of Bierman's Concrete Products, said: "Over the last three years, $1 earned in the construction and construction supply business has been a hard dollar to earn.

"My view is that the companies which are better run will survive and do well but it requires organisations to be extremely efficient.

"It is important for firms to think in the long-term. Short-term thinking is a recipe for disaster. There will always be a future in this business if you're properly managed.'' According to figures which his company compiles on the state of the industry, he said that, since mid-August, construction activity has been greater than for the corresponding period in 1992.

Mr. Ronald Bell, managing director of Wellbottom Aggregates, was also optimistic. "It's been touch and go over the past few years but it's gaining momentum now,'' he said.

Construction work put in Place 1991-1993 Period Pub Pri Tot Q1 1991 7.4 1.7 9.1 Q2 1991 5.9 3.7 9.6 Q3 1991 7.7 4.4 12.1 Q4 1991 4.5 3.6 8.1 Q1 1992 9.1 25.7 34.8 Q2 1992 6.2 8.9 15.1 Q3 1992 9.4 8.1 17.5 Q4 1992 5.7 5.8 11.5 Q1 1993 10.4 6.1 16.5 Q2 1993 2.4 7.1 9.5 Q3 1993 8.2 7.3 15.5 Source: Statistical Department.

Mr. Alan Burland.