By Andrew Bushe
DUBLIN — Despite the international downturn and bleak forecasts that the economy is sharply slowing, people are continuing to spend, with the value of retail sales up 4.8 percent in August compared to the same month last year.
The only major slowdown in spending patterns was a 12.5 percent drop in car sales after the boom last year.
If the motor trade is excluded from the figures, the value of spending increased by 9.7 percent.
It remains to be seen what impact the Sept. 11 attacks on the U.S. will have on consumer confidence.
The volume of sales was up by 2.1 percent overall and by 5.6 percent when cars are excluded.
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The provisional three-month June-through-August figures, which give a more stable indication of underlying trends, show a 0.4 percent increase in the volume of goods bought compared to May-July.
Final figures for May to July show the main year-on-year spending increases were for DIY items and hardware, up almost 22 percent, pharmacy and cosmetics up over 128 percent, electrical goods up almost 16 percent, and clothing up 12 percent.
Austin Hughes, chief economist at IIB Bank, said it looked like Ireland is experiencing a steady slowdown.
“There has been clear slowdown through this year in retail spending,” he said. “I think the important thing to note is that it is a controlled slowdown.
“Excluding car sales, retail sales are still 5.5 percent higher in August than a year earlier. That basically reflects that fact that consumers still have spending power. Income growth is still fairly strong.
“I would be hopeful that income growth will remain strong through next year and that, with a little bit of luck, the downturn in the economy can be limited.”