Consumer caution resulted in negative sales growth in the retail sector towards the end of last year, according to new data released yesterday by the Central Statistics Office (CSO).

The retail sales numbers show that the value of retail sales in November was 1 per cent lower than in the previous month. The decline followed a monthly fall of 2.6 per cent in October.

Economists said the trend was consistent with a general economic slowdown and a consequent weakening in consumer sentiment.

"Despite what the eternal optimists on the Irish economy claim, by any standards there has been a significant dampening of the animal spirits of the Irish consumer over the past couple of years and they continue to dampen," said Mr Jim Power, chief economist with Friends First.

Mr Austin Hughes, chief economist with IIB Bank, said retail sales were likely to remain under pressure in the early months of 2003, as the impact of last December's Budget is felt.

"There are no real suggestions as to what would be the catalyst to turn spending around," said Mr Hughes, who considers a sustained global recovery would be the only real basis for renewed buoyancy for retail sales.

On an annual basis, the value of sales continued to expand in November, but the 2.6 per cent growth was slower than that recorded over most of the past four years. A volume measure, which excludes price effects, points to an annual decline of 0.7 per cent in November.

Figures for the three months ending in November, which the CSO believes offer a more stable indication of underlying trends, point to a healthy 3.3 per cent growth in sales, compared with the preceding quarter.

Detailed numbers for the period between August and October are indicative of strong price sensitivity however, showing volume sales of expensive items such as furniture and lighting to have weakened sharply.