The June release of the Retail Sales Index from the CSO may have gotten more coverage for being inadvertently tweeted a couple of days before its official release but they provide further evidence that the Irish economy has not emerged from recession as was sung from the rooftops with the Q1 National Accounts.
We suggested from the May figures that retail sales were stalling, but now it clear that they are gone into reverse. A graph of the annual changes shows retail sales are turning around but not in a direction to be heralded. The actual index values can be seen here.
After moving into positive territory for one month in April the annual change in the value index has been negative since and in June retail sales by value were 2.8% below the level recorded in June last year. The annual change in retail sales by volume has been positive since February but the recent trend could see this series also resume on a downward trajectory.
The monthly change was negative for retail by both value (-0.7%) and volume (-0.1%). See graph here.
If we look at the index excluding the large effect of motor trades we see a similar pattern emerging. The graph below gives the annual changes in the retail sales index excluding motor trades. The actual index values can be seen here.
Here both the value and volume series are negative, and heading deeper in that direction. By value retail sales excluding motor trades are down 4.8% on the year. This is not a good indicator of VAT revenues. The monthly changes of the index excluding motor trades reflective the annual changes. See graph here.
There’s not much talk of “turning the corner” now!