Car sales push retail figures higher

Higher car sales contributed to a dramatic increase in retail sales in January, according to new figures from the Central Statistics Office (CSO).

Retail sales in January were up by 9 per cent on January 2004 in volume terms - stripping out the effect of price changes - and up 5.2 per cent on December.

Car sales rose in volume terms by 11.4 per cent, confirming a picture of strong performance for transport goods during the month.

But retail sales figures also remained strong in underlying terms. Excluding motor trades, sales volumes were up by 7.9 per cent annually, and up 2.6 per cent in the month.

The January performance strongly benefited from renovation work in the housing market, with sales volumes for hardware, paint and glass products up 18.5 per cent and sales of the broader category of household equipment up 10.2 per cent.

Jim Power, chief economist with Friends First, said strong spending growth would go on. "This spending binge, much of which is being fuelled by credit, looks set to continue throughout 2006 and into 2007 because consumer confidence and spending will be supported by maturing SSIAs, stronger wage growth, and a very expansionary background".

Mr Power added that the economy was strong enough to withstand any further interest rate increases that may occur later in the year.

The Central Bank of Ireland's latest monthly credit statistics show that private-sector credit grew by 29 per cent year-on-year last January.