Busy consumers boost retail sales figures, CSO data show

Consumers were out in strength to boost retail sales in September, according to data released by the Central Statistics Office (CSO) yesterday.

The figures show that the value of retail sales in September was 8.3 per cent higher than in the same month of 2001.

This is the highest annual increase in the value index to be recorded this year, and appears to contradict other Irish data suggesting that consumer confidence had declined over recent months.

The spike is equally dramatic on the volume index, which excludes price effects, with an annual rise of 5.2 per cent, again the strongest seen this year. When September was compared with August, the volume growth was 6 per cent.

Mr Alan McQuaid, chief economist with Bloxham Stockbrokers was reluctant to take much meaning from the sudden jump.

He said the rise was difficult to explain in the context of other data such as redundancies, which were 33 per cent up on 2001 at the end of last month.

"It doesn't make sense," said Mr McQuaid, declining to put much credence in the theory that September's fine weather had boosted retail sales. He also noted that the monthly figures, which are open to revision in subsequent releases, are traditionally volatile.

More optimistic was Mr Colin Hunt, chief economist with Goodbody Stockbrokers, who described the data as "spectacularly strong".

"Consumers haven't gone away you know," he said.

Mr Hunt took particular comfort from a significant boost in car sales, noting that if consumers were feeling unsure of their financial position, they would be reluctant to spend on such high-ticket items. When car sales are stripped out of the headline numbers, the remaining annual volume rise is 4.5 per cent. The monthly volume increase is 3.3 per cent.

"There is very strong underlying activity in general retail sales," said Mr Hunt. "It's positive for consumption for the year - we're looking at an improving trend," he added.

Mr Hunt said the rise was consistent with a steady improvement in VAT receipts since April.

"I think that consumers are going to play a larger role in the economy this year than might have been expected," he said.

On a three-monthly basis, which gives a more stable indication of underlying trends, retail sales volume was 2.3 per cent higher between July and September than it had been for three months ending in June.

Between June and August - the most recent period for which detailed data are available - the largest volume increase came in pharmaceuticals, medical and cosmetic goods, where sales grew by 3.6 per cent. The most substantial fall was recorded in furniture and lighting, where sales declined by 2.4 per cent.