There was further evidence of consumer caution today as new data showed a 2.1 per cent fall in retail sales volumes in March, compared with the same month a year ago.
This marks an acceleration of the consumer spending slowdown from February when retail sales fell by 0.1 per cent, the first fall in four years. In the month the fall in sales volumes was 1.8 per cent.
The value of retail sales also declined in March, dropping 1.4 per cent although over the last 12-months they are still 1.4 per cent ahead, the Central Statistics Office (CSO) said.
Bloxham chief economist Alan McQuaid said the retail sales figures for the January-March period were "very disappointing, and suggest that consumer spending growth for this year as a whole will be a lot weaker than envisaged at the beginning of 2008."
He said with construction sector activity falling off sharply, "the last thing the economy needs now is a significant retrenchment in consumer spending."
On the basis of today's figures he said the Irish economy now looked set for a "hard landing" this year.
The figures show that retail sales across all sectors – with the exception of super markets – have fallen sharply.
Sales of furniture and lighting equipment which act as a guide to health of the residential property market fell by 8.7 per cent in March and have fallen by 12.8 per cent in the 12 months since March 2007.
Sales of televisions, washing machines and other electrical goods have also fallen sharply and these were 3.2 per cent lower in March compared with February. This brings to 9.5 per cent to fall over the year to date.
Books, stationary and newspaper sales are also under pressure, falling 5.7 per cent in the month to March and by 3.9 per cent in the last 12 month period.
The volume of other retail sales, which includes items such as jewellery was down 1.7 per cent in March.
After super markets, sales of vehicles have the second greatest weighting on retail sales and in March these were 8.7 per cent lower than the same months 12 months ago.
If vehicle sales were excluded, the fall in sale volumes in the month to March was 1.1 per cent and the annual change was a rise of 1.2 per cent.
Mr McQuaid said it was already known that car sales were extremely weak again in April and said there was every chance "we will get a negative year-on-year growth rate again in total sales in the first month of the second quarter".
He said the possibility of Ireland posting its first negative average growth rate for the year as a whole since 1983 could not be ruled out if consumer spending and weakness in the housing markets continued over the coming months.
