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Monthly retail sales slow by 4% in August, but annual upward trend continues

Sales in the motor trade were down 4.6% in August compared to July
Sales in the motor trade were down 4.6% in August compared to July

New figures show that the volume of retail sales fell by 4% in August compared to July on the back of slower car and book sales.

Figures from the Central Statistics Office show that the volume of retail sales on an annual basis rose by 9.3% in August compared to the same time last year.

Headline retail sales have now posted 22 successive months of annual growth in both value and volume terms.

The CSO said that when car sales are excluded, retail sales rose by 0.9% on a monthly basis and by 7.6% on an annual basis.

Today's figures show that the sectors with the largest month on month volume increases were furniture and lighting, which grew by 13.2%. 

Other Retail Sales - which includes the like of household fuel oil, bottled gas and flowers and plants - increased by 5.8% and sales of hardware, paints and glass grew by 4.1%. 

The CSO said that the sectors with the largest monthly decreases were motor trades, which fell by 4.6%.

The fall last month came after a big jump in new car sales in July as buyers rushed to get their hands on the new 152 registrations.

Sales of books, newspapers and stationery also eased by 0.3%, while non-specialised stores sales were down 0.2%.

Commenting on today's figures Investec economist Philip O'Sullivan said that retail sales peaked in early 2008 before falling 25.7% to their January 2010 trough. But since then, the volume of sales has recovered by 24.3% and it is now back to within 8% of its all-time high. 

"Given the positive outlook for total employment and disposable incomes - the Government has guided that next month's Budget will result in a reduction in taxes on earnings - we would expect to see further growth in consumer spending into the New Year at least," the economist added. 

Meanwhile, Merrion economist Alan McQuaid said that although retail sales remain erratic on a monthly basis, the underlying trend is positive. He said that while most attention has been on cars, personal spending in other areas is picking up too and is becoming more broad-based. 

"Consumer confidence has hit a nine-year high this year and this is now being reflected in stronger retail spending. Budget 2015 delivered a boost to disposable income with some income tax relief for hard-pressed workers and the Government's recent Spring Economic Statement outlined further tax cuts over the next few years," Mr McQuaid added.