IBEC: Statistics show further evidence of slowing economy

IBEC, the group that represents Irish business, has said that two sets of statistics published today by the CSO provide further evidence of a slowing economy in 2008.

First, the January retail sales data recorded a further slowing down of retail spending, which was becoming evident in the last quarter of 2007. The annual growth of retail sales slowed to 3% compared with 4.4% in the last quarter of 2007 and 6.9% in January of last year.

IBEC Chief Economist David Croughan said: “Undoubtedly the figures are weaker as we moved into the new year, but they have been somewhat distorted by the tax changes on motor vehicles announced in the budget. Excluding motor trades, sales were up a solid 4.8% in January, though this was still markedly weaker than January 2007 and is in line with weakening consumer sentiment.”

Manufacturing output in January recorded only a 2% annual increase, a marked slowdown from the 7.5% increase recorded in 2007. Output in the modern sector slowed to an annual increase of 3.7% in January, having grown by nearly 9% in 2007. Output from the traditional sectors fell by 2.8%.

Mr Croughan said: “While it is harsh to judge a year’s performance on the first month there was a slowdown in the electrical and computer sectors towards the end of 2007, which has carried over into January. The continued strength of the euro is not helping competitiveness and difficult trading conditions are likely to be a feature of 2008.”