Official figures show that consumer spending remained weak in February, despite an increase in motor sales.
The Central Statistics Office said the volume of sales was up 3.2% from January. But many economists prefer to watch the figure excluding motor sales, as these have been boosted over the past year by the scrappage scheme. When motor sales were stripped out, there was a fall of 0.3% from January.
Compared with February last year, sales volumes fell by 0.7%, though without car sales there was a bigger annual drop of 3.2%.
A breakdown showed that motor sales rose by 5% compared with January, while sales at department stores jumped by 11.5%. But sales of furniture and lighting fell 0.6% in the month, while hardware, paints and glass fell 2.2%. Bar sales were down 2.6% in the month, while sales of books, newspapers and stationery dropped 4.5%.
Over 12 months, furniture sales are down 12.9%, while hardware, paints and glass were 5.7% lower. Bar sales have fallen by 5.1% over the past year.
The value of sales, which takes prices into account, gained 1% in the month and fell 0.3% over the year, but these figures were again boosted by the motor sector.
NIB economist Dr Ronnie O'Toole said sales were now back at levels last seen in late 2005. He added that the return of inflation - particularly in fuel - was also squeezing households' spending power.
Davy's Conall Mac Coille said the figures suggested that a rebound in sales in January was due to better weather after December's freezing conditions, and that the outlook for consumer spending remained weak.
Retail Ireland, the IBEC group that represents the retail sector, today said the Government must act to restore consumer confidence so that consumers will spend instead of saving excessively.
Retail Ireland director Torlach Denihan said that people cut back on their spending as many received the first monthly pay cheque at the end January which was affected by the Budget tax increases.
