Retailers hoping for busy Christmas period despite slowdown in spending

A resurgence in consumer confidence is gradually seeing purse strings loosen, with rises in money spent on cars and hardware.

The month-to-month figures from the Central Statistics Office show sales were sluggish between August and September, with an overall rise of just 0.1pc.

However, economists say that the outlook remains positive.

Investec economist Philip O'Sullivan said retail sales have now posted 11 successive months of growth on a year-to-year basis.

He said the economy is seeing increases in employment, upward pressure on public and private pay and the highest level of consumer confidence since January 2007.

"When you take all those factors together, the outlook for consumer spending in Ireland remains positive," he said.

"We should see a strong finish to the year absolutely. I would expect the crucial Christmas sales period to be very strong."

He said the disappointing month-to-month figures are less important in a small country like Ireland, where they can be distorted by weather effects and the timing of sales and events.

"I wouldn't necessarily read too much into it. I prefer to look at longer trends and I think they are giving very clear signals," he said.

The largest increases in sales were in the 'motor trades' and 'hardware, paints and glass' sectors.

Motor trades are up 21pc on the same period last year and have increased by 2.4pc month to month.

Sales of hardware, paints and glass jumped by almost 5pc between August and September and are up 6.6pc on the same time last year.

Mr O'Sullivan said the fact that these "big ticket items" are selling strongly is particularly significant.

"People can finally see that a lot of the heavy lifting and sacrifices that were made over the past couple of years are now starting to pay off," he said.

Brian Cooke, deputy director general of the Society of the Irish Motor Industry (SIMI) said the level of new car sales is "much better than was expected at the start of the year".

"The important thing for the industry is that this is only the starting point.

"We were averaging sales of 160,000 in the years 2001 to 2008 so to get back to those sustainable levels we are still a bit short," he said.

Patrick Kelly, President of the Hardware Association of Ireland (HAI) said the figures reflect what HAI members across the country have been seeing on the ground.

"The prolonged good weather had the effect of extending the seasonal selling period and consumer sentiment was certainly more positive … without doubt, the general uplift in the economy is bringing more Builders and Consumers through the doors," he said.

Hotels and retailers have also enjoyed a welcome boost with Failte Ireland reporting the best year for Irish tourism since the downturn with increases in both international and domestic holidaymakers.

Hotels.com spokesperson, Lizann Peppard said: "We've seen an increase of 14pc in people worldwide looking for hotel getaways in Dublin, compared to the same period in 2013."