Official figures show a pick-up in consumer spending in April, led by the motor sector as the scrappage scheme continued to lift car sales.
The Central Statistics Office said the volume of retail sales in April rose by 6% from the same month last year, with a monthly increase of 1.8%.
Sales excluding the motor sector, which are seen by many economists as a more important measure, were up 0.3% from April last year, the first annual increase since March 2008.
Economists have been watching this number more closely because a dramatic swing in car sales has been distorting the overall retail sales figures. Car sales suffered a collapse in the early months of last year, but have been boosted this year by the scrappage scheme.
The value of retail sales, which takes prices into account, rose by 0.7% from March, giving an annual increase of 1.6%, the first since February 2008.
A breakdown of sales volumes in April showed that motor sales jumped by 5.9% in the month and have risen 35.4% over the year. Sales in non-specialised stores - which include supermarkets - rose 1.1% from March, while hardware, paints and glass sales were up 4.2%. But bar sales fell another 0.2% in the month and are down almost 10% over a year.
Meanwhile, there was more bad news for the retail sector with news that an estimated 50 staff have lost their jobs with the closure of four Reid Furniture outlets in Galway, Sligo, Cork and Limerick.
Retailers cautious despite sales rise
Bloxham economist Alan McQuaid said that - providing the euro zone debt crisis did not affect the consumer mood - there was 'every chance' that overall personal spending would be higher in real terms this year than in 2009.
Goodbody economist Deirdre Ryan said consumer spending was continuing to recover, though falling employment would remain a drag on spending. She said that, if other economic data showed signs of improvement, spending could now be flat for the whole of 2010.
Industry group Retail Excellence Ireland (REI) called the figures encouraging, but said they had to be considered in the context of a decline of nearly 30% from 2008 levels.
IBEC group Retail Ireland also said that the cash value of sales in the first four months of this year was still well down from the same period last year.
