Even the more pessimistic of economic commentators shuddered yesterday at the CSO’s latest update on the retail sector. We knew it was bleak, but were not quite prepared for the awfulness of the figures.

Sales were down almost 2 per cent in the month and by closer to 4 per cent in the year, with even core sales, stripping out volatile car purchases, almost hitting a 2 per cent monthly drop. Across the sector, the first quarter has delivered a 3 per cent fall in retail sales when compared to the final three months of 2012 - a decline might have been expected, but not that big a drop.

It makes sense for the early months of the year to represent a slower period for retailers - the December Budget is the biggest culprit here, with self-imposed post-Christmas austerity also a factor. This year, there’s also the spectre of the property tax - a considerable outflow that will eat into the disposable income of even the more prosperous households.

Retail Ireland, the Ibec group, also wondered about the weather in March, which was unseasonably cold and not conducive to unnecessary retail forays. There were also more days off than usual - St Patrick’s Day and Easter both fell in the month and are likely to have had an impact, even with Easter Monday tipping into April.

The problem now is how to work out whether the retail downturn is headed over coming months - the weakness of the March figures was an unpleasant surprise after poor returns in January and February but what if April follows suit? It is at this point that forecasts for spending for the year come under scrutiny and the Government starts to worry more than it does already about hitting its economic targets and exiting the bailout as planned.

More clarity should emerge when the property tax payments have worked their way through our systems and our household budgets become less lumpy. Perhaps the tempered optimism in the jobs market will even start to trickle down to our wallets.

The one potential glimmer in the background is that the savings ratio remains high, suggesting that households have some degree of cash but are choosing to use it to pay down debt rather than spend. This is of course sensible and to be encouraged. The Government’s problem comes in trying to do this while also persuading us to spend. It won’t be easy.