Sharp fall off in retail sales during April

IRISH retail sales slowed sharply in April, according to the latest figures from the Central Statistics Office.

Economists are divided over whether the figures point to a general slowing in the Irish economy or are merely a slight aberration in the growth pattern. They will be monitoring the raft of data due to be released next Tuesday to confirm any trends.

Irish retail sales fell a provisionally adjusted 0.4 per cent in April from March, leading to a year on year rise of 5.9 per cent from 10.5 per cent year on year in March. Economists had expected a figure of around 7 or 8 per cent.

Final figures for March showed sales rose 1.8 per cent on the month land 10.5 per cent on the year, compared to provisional estimates for 1.4 per cent from February and 10 per cent on the year. Sales volume in March was up 1.6 per cent on February and 8.5 per cent higher than March last year.

On a three month basis, which gives a more stable indication, the seasonally adjusted level of retail sales from February to April 1996 is 4 per cent higher in value than from November 1995 to January 1996 and 8.2 per cent higher than the corresponding period of 1995.

Among individual components, garages and filling stations registered the largest increase in the volume of retail sales in the preceding three months at 13.8 per cent. The largest decrease in the volume of business over the same period was recorded by electrical goods which fell 7.4 per cent.

Dr Dan McLaughlin, chief economist at Riada Stockbrokers, said that the fall in retail sales combined with falling industrial production and capacity utilisation pointed to a slowing in the Irish economy.

According to figures released last week, industrial production in February fell to 11 per cent from 20 per cent in January and an average of 19 per cent over 1995.

However, he noted that one reason the year on year retail sales tell rapidly is the large rise recorded in April 1995. At the same time in May and June last year the value of sales fell pointing to an increase in the yearly figure over the next two months.

"The figures suggest that the extraordinary boom in exports last year of 17-18 per cent won't be repeated," he said. "We are now looking at an export rise around 10 to 12 per cent and a similar rise in industrial production for 1996."

However, Mr Eoin Fahy, economist at Ulster Bank Markets, cautions that Irish economic statistics are notoriously unreliable.

"Frankly, I'm not sure if I believe the retail sales or industrial production figures, he said. If the real Irish economy was, declining someone would notice, he added.

Mr Jim O'Leary, chief economist at Davy Stockbrokers, also said he was not inclined to infer a slowdown from the retail sales figures. However, he said the industrial production numbers were a different matter.