FURTHER EVIDENCE of an economic slowdown emerged yesterday with new figures showing sluggish retail sales and a marked slip in manufacturing output.
Retail sales volumes increased by 0.9 per cent in January compared with December, with the increase over the previous January just 3 per cent, the lowest annual rate of increase in any given month in three years, according to figures released by the Central Statistics Office (CSO).
Excluding motor trades, sales were down 0.1 per cent in the month and up 4.8 per cent in the year. The January retail sales data recorded a further slowdown of retail spending, which was becoming evident in the last quarter of 2007, said business lobby group Ibec. "Undoubtedly, the figures are weaker as we moved into the new year but they have been somewhat distorted by the tax changes on motor vehicles announced in the budget.
"Excluding motor trades, sales were up a solid 4.8 per cent in January, though this was still markedly weaker than January 2007 and is in line with weakening consumer sentiment," said Ibec chief economist David Croughan.
The cooling of retail sales, particularly evident in the final quarter of 2007, looks likely to continue in coming months, said Ulster Bank economist Lynsey Clemenger.
"Indeed, it would appear that weak consumer confidence and slower employment growth are increasingly feeding through to consumer spending," she said.
Manufacturing output in January recorded only a 2 per cent annual increase, a marked slowdown from the 7.5 per cent increase recorded in 2007, Ibec said.
Output in the modern sector slowed to an annual increase of 3.7 per cent in January, having grown by nearly 9 per cent in 2007. Output from the traditional sector fell by 2.8 per cent, it said.
"While it is harsh to judge a year's performance on the first month, there was a slowdown in the electrical and computer sectors towards the end of 2007, which has carried over into January," said Mr Croughan.
"The continued strength of the euro is not helping competitiveness and difficult trading conditions are likely to be a feature of 2008."
