IBEC: Weak retail sales reflect deteriorating labour market

Employer's group IBEC today said that rising unemployment and deteriorating consumer confidence are causing the continued fall in retail sales.

The most recent retail sales data from the CSO show that the volume of retail sales fell by an annual 5.2% in June. Excluding motor trades, the annual decline was 1.8%.

Commenting on the data, IBEC economist Reetta Suonperä said: “The CSO figures show that, excluding motor trades, the volume of retail sales in the first half of 2008 was essentially flat.

“Annual growth of 2.1% in the first quarter gave way to a fall of 2.3% in the second quarter, as the slowing economy and weak consumer sentiment began to bite.

“Sectors related to housing continue to be especially badly hit, with large annual declines recorded in the sales of electrical goods and furniture and lighting. Given the uncertain economic climate, people are naturally becoming more cautious, postponing any discretionary large-scale purchases.”