Retail sales fell 4.7 per cent in August on the back of falling car sales having jumped 13.8 per cent the previous month.

The monthly numbers are proving extremely volatile because of the new pattern of car sales which is linked to the twice-yearly registration system.

The latest figures from the Central Statistics Office (CSO), however, indicate that year-on-year retail sales rose 5.2 per cent, reflecting a moderate recovery in the sector.

Equally, when motor trades are excluded there was a monthly rise in retail sales for August of 0.9 per cent and a 4.1 per cent increase year-on-year.

The sector with the largest monthly decrease was motor trades, which saw sales fall 11.1 per cent.

There were also decreases in sales at bars (-2.7 per cent) and department stores (-1.1 per cent).

The sectors with the largest monthly increases were furniture and lighting (+8.8 per cent ); other retail (+5.1 per cent); and hardware, paints and glass (+4.6 per cent).

The Irish Small and Medium Enterprises Association (Isme) highlighted the need to have a progressive budget for the SME sector, calling on the Government to reduce the employers’ PRSI rate to offset recent wage increases.

“The retail industry plays a vital role in our communities, villages and towns throughout Ireland, combined with wholesale it is the largest private sector employer in the country employing more than 275,000 people, ” Isme boss Mark Fielding said.

“Retailers are still struggling and finding it difficult to deal with the excessive increases in business costs; rents, interest rates and insurance increases are crippling businesses and having a major impact on their bottom line.

“Budget 2017 is an opportunity for the Government to inject a much-needed boost into the retail sector; the Government must fulfil its pledge to cut employer PRSI contributions for low-income workers,” said Mr Fielding.