Retail sales rise again in August
RETAILS SALES rose in August for the second consecutive month, according to the Central Statistics Office.
All four of the main measures of sales, which are adjusted for seasonal factors, rose in both July and August. It was the first time this year that a two-month uptick in spending in shops nationally took took place.
The two increases returned sales volumes and values to levels registered at the beginning of the year.
The volume of retail sales rose by 0.4 per cent in August compared with July, and by 0.1 per cent when volatile motor trades were excluded.
The value of sales rose by 0.5 per cent, rising to 0.7 per cent when car sales were stripped out of the overall index.
Ibec group Retail Ireland saw some positives in the figures. “We predicted something of a sales bounce following the positivity that the Irish Olympic and Paralympic teams’ outstanding performance in the London Games generated and this has materialised,” director Stephen Lynam said.
“The recent improvements in consumer confidence, if maintained, could lead to the start of a better period for retailers.”
But Goodbody economist Juliet Tennent said lack of credit in the markets was contributing to the continuing weakness in retail sales. Weakness in the labour market was also an issue.
“It is hard to see a major upward rise in personal expenditure in the coming months given the current uncertain economic [and] financial climate,” she added.
Merrion’s Alan McQuaid said: “Heightened uncertainty about the prospects for future incomes is set to persist due to the high level of unemployment, such that consumers are likely to maintain buffers to protect against adverse income shocks.”
He warned that things wouldn’t get any better in the short term, and with the prospect of austerity measures in December looming.
That opinion was shared by Davy chief economist Conall MacCoille. “Overall, our forecast for a 1.7 per cent decline in consumer spending in 2012 looks a little pessimistic, given the 1.1 per cent fall in retail sales in the first eight months,” he said.
“But the broad picture is that falling disposable incomes from tax rises and weak pay growth have pressed down on consumer spending in 2012, as we expected.”
The Irish Small Medium Enterprises Association said the deepening recession was due to a lack of Government policies in relation to the retail trade, and thousands of jobs would continue to be at risk for the foreseeable future.
“While the monthly figures show a slight increase, today’s figures confirm that retail sales are down almost 25 per cent since 2007, with little sign of improvement,” chief executive Mark Fielding said.