Retail sales give economy another boost

THE economy received another boost yesterday with signs that retail sales are picking up and unemployment is falling.

According to the Central Statistics Office (CSO), retail sales volumes rose by 2.5% in April with the value of sales rising by 3.5% over last year, though there was a 0.4% drop month on month.

Even so, economists said the figures added to what is already been a positive week for the economy with indications growth this year will surge.

"We would expect a continuation of the upward trend. One of the most encouraging elements which we take from the retail trade data is the willingness of consumers to spend on the larger big-ticket items. This is evident in the strong growth in motor sales. Motor trade sales are ahead by 6.5%," Goodbody Stockbrokers said.

The positive retail sales figures come a day after it emerged that economic growth raced ahead by 6.1% in the first three months of the year, while the number of people signing on hit an 18-month low, the CSO said.

Numbers claiming unemployment benefit dropped to a seasonally-adjusted 167,000 in June from 168,000 in May, the lowest level of claims since December 2002. Economic growth this year will be 6% Bank of Ireland economist Dan McLaughlin said, or possibly higher if trends continue.

NCB Stockbrokers said: "Irish GDP is estimated to have grown 6.1% year on year in the first quarter. This confirms the picture of an economy that has recovered to what we believe is its sustainable growth rate in the region of 5% to 6% into the medium term."

Momentum in the economy has been picking up in recent months, despite a sharp rise in oil prices and concerns about Middle East security.

Business investment and consumer confidence has picked up globally and this has helped to spur the economy.

Capital investment and exports are soaring. In the past few weeks the IDA has announced several major employment projects including 1,000 jobs at the medical devices company Guidant in Clonmel, 400 at a €1.6bn investment in Intel's facilities in Kildare and a €69m research centre in west Dublin created by Bell Labs.

According to IDA sources several more job projects are in the pipeline.