Sunday, 3 Mar 2024

Retail sales buoyant as jobs and wages on the up

Retail sales posted another strong month in September thanks to rising job numbers and accelerating wage growth, with the headline number up 1.5pc from August and 6.1 pc from a year ago in volume terms, the Central Statistics Office said yesterday.

Excluding the volatile car sector, so-called core retail sales posted a 2.8pc gain on the month and 6.3pc on the year.

“As regards 2018, we think personal spending will post another positive increase as the unemployment rate continues to drop and disposable incomes rise,” said Merrion Capital Economist Alan McQuaid.

Mr McQuaid is forecasting that headline sales will rise 3.5pc-4pc for the full year and that core sales will rise 4pc- 4.5pc.

“What happens on the currency and Brexit fronts will be important factors in determining overall spending patterns in the Republic in the next 12 to 18 months, but we are still expecting to see healthy personal consumption in the Irish economy over the remainder of this year at least and into 2019 as well as things currently stand,” he wrote in a research report.

The biggest gainer in terms of sales was a surge in electrical goods – up 9.3pc in volume terms on the month and a 22.8pc on the year, while the largest decline was recorded by department store sales, which dropped 4.2pc.

The economy is on track to expand 6.7pc this year and by 4.8pc in 2019, according to Central Bank forecasts, putting it at the top of European growth leagues. The unemployment rate is set to dip to 4.9 pc next year, thanks to robust domestic demand.

The Central Bank expects wage growth to accelerate from 2.8pc this year to 3.3pc in 2019, reflecting the tighter labour market and continuing growth trend that started in 2015.

Brexit is not the only economic risk on the horizon, however.

Italy is on the edge of a clash with the EU over its budget and US President Donald Trump’s trade policies have yet to bite.

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