Retail sales growth hits 10-month low on Brexit fears

New CSO data show sales grew by 1.2% in January on annual basis

The annual rate of growth was down from 3.2 per cent in December and the lowest annual rate recorded since March last year. Photograph: Nick Bradshaw

The annual rate of growth was down from 3.2 per cent in December and the lowest annual rate recorded since March last year. Photograph: Nick Bradshaw

 

Retail sales volumes grew at their weakest level in nearly a year in January amid concern consumers may be tightening their belts ahead of a global slowdown and Brexit.

According to the latest Central Statistics Office (CSO) data, sales fell by 1.2 per cent in January but were up 1.2 per cent on annual basis.

The annual rate of growth was down from 3.2 per cent in December and the lowest annual rate recorded since March last year.

The weaker annual growth was linked to an ongoing fall-off in new car sales as consumers opt to import used cars from the UK.

If car sales are excluded, there was an increase of 0.7 per cent in volume terms in January and an increase of 4 per cent year on year.

The latest figures showed that the volume of car sales slowed by 2 per cent month on month in January while sales of fuel products fell by 0.6 per cent.

The sectors with the biggest monthly increases were “other retail sales”, which includes a certain section of internet purchases, jumped by 45 per cent, while sales of hardware, paints and glass rose 2.3 per cent.

Fluctuation

“Retail sales continue to remain erratic on a monthly basis and are still swinging back and forth, but the underlying trend is positive,” Cantor Fitzgerald analyst Alan McQuaid said.

“Even with the fluctuation in consumer sentiment, overall personal spending has been positive in the past few years, boosted by the increase in the numbers employed in the country,” he said.

“This is despite the fact that the weakness in sterling since the June 2016 Brexit referendum has enticed some shoppers to spend in Northern Ireland, ” Mr McQuaid said.

“What happens on the currency and Brexit fronts will be important factors in determining overall consumer spending patterns in the Republic over the next 12 to 18 months, but we are still expecting to see healthy personal consumption in the Irish economy in 2019 as things currently stand,” he said.