Retail sales figures dipped in December from the strong levels recorded in November.

The December 2000 retail sales index was 4.2 per cent lower than the November index, when seasonally adjusted, according to data released by the Central Statistics Office (CSO) yesterday. Overall, the value of retail sales rose by 10.2 per cent in December 2000 compared to December 1999.

While some commentators have taken the decline from November to December to confirm a slowing of the economy, the CSO said the figures also reflected that sales were particularly strong in November and the December figures represented a compensatory effect for this.

The fall was also likely reflected in many consumers deferring new car purchases until the new year and others holding out for bargains in January.

"A large part of the drop could be due to car sales and it certainly appears that in the second half of the year car sales slowed quite rapidly," said Mr Dermot O'Brien, chief economist at NCB Stockbrokers. "But there's no great reason to believe consumer spending is slowing."

On a three-month basis, the October-December volume figures showed a 1.1 per cent rise compared with the three months ending September 2000.