The housing slowdown hit the Republic's shops in October with sales of household goods slowing, the latest figures show.

The Central Statistics Office (CSO) said yesterday that retail sales in October grew by just 0.5 per cent on the previous month. Businesses selling household equipment saw a fall of 2.9 per cent in actual sales from September to October.

Ulster Bank Capital Markets (UBCM) economist Pat McArdle said yesterday that the fall in household goods sales reflected the slowdown in construction, which has largely hit new home sales. He predicted the average increase in retail sales for this year would be "slightly less" than the 6.5 per cent that UBCM originally forecast.

The CSO said yesterday that retail sales volumes, excluding price, grew 5 per cent to 126.6 in the 12 months to the end of last October. This was well below the 8.6 per cent growth recorded in the 12 months to October 2006. The index is set at a benchmark of 100, which was set in 2000.

The bar and motor trades showed strong year-on-year growth at 3.2 per cent and 3.4 per cent respectively. However, Mr McArdle said the rate of increase in these businesses was slowing.

The value of retail sales, also calculated from a 2000 benchmark of 100, grew 6.6 per cent year-on-year to 142.6 from 133.8.

Goodbody economists Dermot O'Leary and Deirdre Ryan said that in the absence of third-quarter figures for services spending, it was hard to predict that yesterday's figures would hit their 6.5 per cent forecast for consumption growth this year.

"However, the slowing annual growth trends do highlight that consumption should slow as we go into 2008," they said.