There was an annual increase of 4.3 per cent in the volume of retail sales during May compared with the same month last year, according to the latest figures from the Central Statistics Office.
Seasonally adjusted, the volume of retail sales increased by 0.1 per cent in the month of May.
Excluding motor trades, there was an increase of 1.5 per cent in the volume of retail sales in May when compared with April, and there was an increase of 4.7 per cent in the annual figure.
The sectors with the largest monthly volume increases were hardware, paints and glass (8.9 per cent), and books, newspapers and stationery (4.3 per cent).
The sectors with the largest month on month volume decreases were furniture and lighting (-4.7 per cent), and bars (-2.9 per cent).
There was a decrease of 0.4 per cent in the value of retail sales in May when compared with April and there was an annual increase of 3.7 per cent when compared with May 2017.
Excluding motor trades, there was an increase of 1.4 per cent in the month and an increase of 3.5 per cent in the annual figure.
‘Big picture’
An analyst with Davy said the “big picture” was that Irish consumer spending is set for “another solid increase”, driven by positive developments in the jobs market and household earnings.
“Once again the best performing sectors are those which suffered badly during the recession, big-ticket items and discretionary purchases, where spending is now bouncing back,” he said.
“Sales of hardware paints and glass are up 12.6 per cent on the year - no doubt helped by the recovery in homebuilding activity. Sales of furniture and lighting are up 6 per cent on the year and electrical goods are up 8.3 per cent.
“Department stores sales are up 6.4 per cent and non-specialised stores (including supermarkets) sales increased by 4.8 per cent.
“Looking forward, we expect Irish consumer spending to record 3.2 per cent growth in 2018 after the 1.9 per cent rise in 2017 and 3 per cent growth in 2019.”
Erratic
Alan McQuaid, an economist with Merrion Stockbrokers, said retail sales “remain erratic” on a monthly basis and that while they are “still swinging back and forth”, the underlying trend is “positive”.
“Even with the fluctuation in consumer sentiment, overall personal spending has been positive in the past couple of years, boosted by the increase in the numbers employed in the country,” he said.
“This is despite the fact that the weakness in sterling since the June 2016 Brexit referendum has enticed some shoppers to spend in Northern Ireland.
“What happens on the currency and Brexit fronts will be important factors in determining the spending patterns of some consumers in the Republic over the next twelve to eighteen months, but we are still expecting to see healthy personal consumption in the Irish economy over the remainder of this year at least and probably in 2019 as well as things currently stand.”
As regards 2018, Mr McQuaid said personal spending will post “another positive increase” as the unemployment rate drops closer to 5 per cent and disposable incomes rise.
“We now think headline sales will post an increase of between 2.5 per cent and 3 per cent, with core sales 4.5-5 per cent higher on average than 2017,” he said.
