Economics: Headline Irish retail sales forecast to have fallen month-on-month in September

The domestic economic focus on Tuesday turns to the official retail sales data for September, which will be released by the Central Statistics Office later this morning.

Headline sales were down 3.3% in the month in August but up 2.6% in the year in volume terms, as against the revised annual rise of 4.9% (+5.5%) posted in July. In the first eight months of 2018, sales were up 3.4% on average on the same period last year.

Excluding motor trades, retail sales were up 0.8% in the month and were 4.0% higher in the year, up from the revised annual increase of 2.9% posted in the previous month. “Core” sales were 3.8% higher year-on-year in the January-August period.

The sectors with the largest monthly volume decreases in August were Books, Newspapers & Stationery (-4.0%) and Motor Trades (-3.9%). Meanwhile, the sectors with the biggest monthly rises in the month were Other Retail Sales (+7.3%) and Food, Beverages & Tobacco (+2.9%). For 2017 as a whole, headline sales were officially 3.9% higher on average in volume terms than 2016 while “core” sales were 5.8% higher.

As regards 2018, we think personal spending will post another positive increase as the unemployment rate continues to drop and disposable incomes rise. Following the August figures, we now think headline sales will post an increase of between 3.0% and 3.5% this year, with a rise of 3.5-4.0% projected for “core” sales.

Looking at September, headline sales are projected to be 1.9% lower in the month, which would give a year-on-year increase of 3.0% while for sales excluding motor trades a monthly rise of 0.2% is anticipated, which would leave the annual rate of increase unchanged at 4.0%.

Alan McQuaid (30/10/18)