Retail sales rose in August, boosted by strong spending on the high street, the latest figures from the Central Statistics Office show.
On an annual basis, the volume of sales increased by 5.5 per cent in August, while the monthly gain stood at 1.6 per cent. At 117.5, the index reading was the highest since January.
Excluding car sales, the index reading of 128.3 - up 7.3 per cent on an annual basis and 0.8 per cent on the month - was the highest for more than four years.
"It is an extremely strong number," said Jim Power, chief economist at Friends First. "It confirms that the consumer is the biggest driver of growth in the economy at the moment."
While growth in consumer spending slowed in July, August marked a pick-up in activity, led by a 10.3 per cent annual gain in department store sales. "With sales of high street items, such as clothing and footwear, up strongly, it is clear that the appetite for discretionary spending remains quite strong despite the high level of price increases experienced over the past year," said Dermot O'Leary, chief economist at Goodbody.
Meanwhile, growth in home-related spending slowed in August in line with the general slowdown in the housing market. Sales of furniture and lighting were up only 4.1 per cent on the prior year, compared with the higher levels of growth of 12.7 per cent seen in May. Hardware sales, seen as reflective of activity in the housing market, also slowed with growth of 9.4 per cent in August.
The figures, released yesterday, also show that the value of retail sales increased by 7.2 per cent in August compared with the same month last year. Excluding motor trades, the annual gain in value was 8.4 per cent.
Following the release of the figures yesterday, economists remained optimistic about the outlook for the rest of the year, with growth forecasts ranging from 6.2 per cent to 6.7 per cent.
"Growth in disposable income should remain healthy reflecting continued growth in employment and real earnings," said Alan McQuaid, chief economist at Bloxham.
