Friday, September 27 13:58:02
The latest official retail sales data from the CSO, released this morning, were weaker than we expected with headline sales down 1.6pc in August in volume terms but were still 2.6pc higher in the year.
After falling by 0.8pc on average on an annual basis in the first half of the year, the third quarter promises to be much stronger, with headline sales in July-August 3.7pc higher than the same period in 2012. Excluding motor trades, sales were down 0.2pc but up 1.2pc in the year in August.
The sectors with the largest monthly volume decreases in August were Motor Trades (-9.7pc); Hardware, Paints & Glass (-7.6pc) and Books, Newspapers & Stationery (-6.0pc).
Meanwhile, the sectors with the largest monthly increases were Electrical Goods (+7.9pc); Furniture & Lighting (+3.8pc) and Clothing, Footwear and Textiles (+2.6pc). This in the main was a reversal of the sectoral spending trends in July, and only underlines the current uncertain nature of consumer spending from month to month.
It is clear also from the most recent consumer sentiment surveys that households are still very nervous about the economic climate and are more willing to save than spend until there is greater clarity about the outlook going forward. After a drop of 0.3pc in real terms last year, there is now based on the third quarter numbers, every possibility that personal spending on goods and services will post a small positive gain in 2013. This in turn will help offset some of the negative impact on GDP growth from the weaker net exports performance. Overall, though, GDP is likely to be little changed this year on 2012.