Biggest retail sales volume increase since 2005

January saw the largest annualised volume increase in retail sales in almost a decade, CSO data has revealed.

Sat, 01 Mar, 2014 - 00:00

Geoff Percival

Latest monthly consumer spending data, published yesterday, shows that the volume of retail sales grew by 2.3% in January when compared to December.

However, when measured on a year-on-year basis, the increase was even more pronounced — rising by 8.9%; the highest such rise since May 2005.

The biggest monthly spending increases went on items such as furniture and cars, with new vehicle sales the main driver of January’s growth.

Without them, retail sales were actually down 1% on a monthly basis, but were still 2.7% higher year-on-year.

In value terms, a 1.8% monthly increase was seen in January, with a 6.9% year-on-year jump evident. Excluding motor sales, value was down 0.3% in the month but up 0.9% on an annual basis.

Overall consumer spending levels for 2013 are still set to be in negative territory, according to Merrion Stockbrokers’ chief economist Alan McQuaid, but he remains confident of retail sales this year showing the first positive contribution to GDP growth since 2010.

“A key issue, going forward, will be the state of the labour market and the signs are encouraging on this front, as we’ve seen with the most recent official employment data and the Live Register in recent months.

“Having peaked in February 2012, the unemployment rate has fallen steadily since. A continuation of this trend in 2014 will be reflected in stronger retail sales in our view,” he said.

Stephen Lynam, of the Ibec-affiliated representative body Retail Ireland, welcomed the CSO figures, saying that as the economy continues to improve, so should retail sales; but he remained cautious. “While the CSO numbers are broadly encouraging, there have been false dawns before — sales have risen, only to fall back again.”

Small firms lobby group ISME said the good news needs to be seized upon with the immediate establishment of the Retail Consultation Forum, proposed in the new Action Plan for Jobs programme.