Sales on the high street dipped in February due to weak car sales, the latest retail sales figures have revealed. However, a leading analyst described the development as temporary and has predicted strong retail sales growth for the full year.

The latest retail sales index from the Central Statistics Office (CSO) suggests that total sales volumes grew by 6.8 per cent in annual terms and by 6.9 per cent when sales of cars are excluded. But, compared to January, motor sales were sharply lower in February, down 3.8 per cent. Sales of other big-ticket items also fell, with electrical goods down 1.6 per cent on the month, furniture and lighting products down by 2.8 per cent and hardware product sales falling by 5.5 per cent. As a result, total sales volume fell by 2.2 per cent in February, compared to January's levels, when adjustment is made for seasonal factors.

Excluding motor sales, they rose by 1.3 per cent, a result influenced by continued strength in demand for other goods. Spending in department stores rose by 10.3 per cent in the month.

A recent survey of consumer sentiment, conducted by IIB Bank and the ESRI, shows that consumers backed off making large purchases as news of high-profile job losses made them less confident about their financial future.

However, Alan McQuaid, of Bloxham Stockbrokers, said that the trend was temporary. He predicted that retail sales would rebound during the year as SSIAs matured and personal incomes continued growing. "Despite all the recent negative hype in the media about the economy and falling consumer confidence, the outlook for 2007 is for a further pick-up in the rate of increase in consumer spending," he said yesterday.

Bloxham predicts that retail sales growth, which it forecasts to reach 7.25 per cent this year, would underpin strong growth in the overall economy. "Strong personal consumption will be a key factor in GDP rising by 5 to 6 per cent in real terms again this year and once more topping the eurozone growth league," Mr McQuaid said.