With the summer rental market still soft and an economy that has grown overly reliant on real estate and construction trades, business leaders on the Vineyard are keeping a wary eye on trends in commerce as the summer season begins.

Memorial Day weekend brought a small flood of visitors and many businesses reported sales were brisk.

But it was not enough to bolster confidence.

“In my opinion, we haven’t hit bottom yet,” said Steven Bernier, owner of Cronig’s Markets. “I wish I could say the worst is behind us, but I don’t think the trickle-down effect [from the national recession] has even arrived here yet . . . normally it takes longer to reach the Vineyard.” He added:

“The layoffs in the auto industry are only starting now . . . it seems to me the fallout may last two to five years.”

Mr. Bernier, also a keen student of global finances, predicted a downturn in European currencies will also hurt business this summer. He said a weak American dollar last summer gave added value to the euro, leading to more foreign visitors, but he said that will not be the case this year. And consumer confidence at home is also down, he said.

“Last summer the big issue was gas prices, but the problems the nation faces this year are much worse,” Mr. Bernier said.

Dennis daRosa, president of the Oak Bluffs Association, said many merchants reported a solid Memorial Day weekend, with business up slightly from last year. But he agreed it is no longer a reliable predictor for the summer.

“It used to be people would make plans to come to the Vineyard for Memorial Day weekend and stick to those plans. Now they wait until the last minute to see what the weather says. We’re sort of a slave to the weatherman now; if he says it is going to rain on the weekend, it kills us. And a lot of times he’s wrong and it winds up being sunny,” he said.

Steamship Authority traffic numbers from Memorial Day weekend appear to support Mr. daRosa’s weather theory.

Passenger traffic over the holiday weekend from May 21 to May 25 was down only slightly from last year and essentially flat, from 23,312 to 23,104. But for four out of the five days the numbers were up over last year, with the exception of Sunday, when it rained in the afternoon and weather forecasters predicted bad weather.

Passenger traffic on the Thursday before Memorial Day was up sharply over last year, jumping around 14 per cent, but Sunday passenger traffic dropped 22 per cent. Car traffic was also up overall, from 3,595 last year to 3,679 this year.

Karl Buder, owner of the Thorncroft Inn in Vineyard Haven, said his Memorial Day weekend business was about the same as last year. And he said he would be content if that trend continued through the summer. “I am optimistic things will be as good as last year. And last year was only adequate. If we get adequate again, I’ll be okay with that,” Mr. Buder said.

Peter Martell, owner of the Wesley Hotel in Oak Bluffs, said people no longer plan their vacations well in advance, which means the Vineyard often becomes a last-minute vacation destination, making it nearly impossible to predict trends.

“There’s less people picking a week in the winter or springtime and then planning their vacation around it. Now people want to wait; they want to wait to see how their money is doing; they want to wait to see what’s available; they want to wait to see what the weather will be. It’s wait, wait, wait,” he said.

Meanwhile, the economic downturn may be creating a bit of a buyer’s market on the Island, especially in the home rental market. A report released last week by HomeAway, which represents 200,000 vacation properties across the country, found that 66 per cent of its rental property owners had offered special deals or incentives so far this year in response to the economy.

Joan Talmadge, co-owner of the Web site WeNeedaVacation.com, that matches vacationers with rental properties, said there are many bargains to be found, as some homeowners drop their rates.

“People are shopping around more, trying to get the best deal,” she said.

Chris Wells, president and chief executive officer of Martha’s Vineyard Savings Bank, reports seeing both positive and negative indicators. Deposits overall have been strong and are up, he said, but some of that can be tracked to people turning to small local banks for safekeeping their money. He said commercial deposits were strong over Memorial Day weekend, with deposits up in Oak Bluffs, about the same in Vineyard Haven and a bit down in Edgartown.

Mr. Wells said what worries him most is the Island’s continued reliance on the construction industry, which has been crippled by the recession. Many Island contractors are out of work — or about to be out of work. And like Mr. Bernier, Mr. Wells said he believes the Vineyard may not feel the worst effects of the recession until next winter.

“Historically there is always high unemployment here in the winter. But what I am worried about is . . . trade-related employment. It used to be a contractor would finish a job, and then move onto the next job. Now when someone finishes a job, there is nothing left to do,” he said. He concluded:

“It’s a mix of good news, bad news. Our loan volume and our pipeline for loan volume is tremendously strong. But then, interestingly, the number of new people coming to the Vineyard, creating the potential for new accounts, is way off.

“It’s really hard to say if we’ve hit rock bottom, or to predict if rock bottom is ahead of us or behind us. So far, the bottom, according to many indicators, was in March, and so far April and May have been a little better. But that’s not to say things won’t get worse in July or August . . . you just have to wait and see.”