Retail sales in Ireland have surged by 9.2% in March 2015, when compared to March 2014, according to the latest figures released by the Central Statistics Office. On a month to month basis retail sales registered an increase of 1.4%.
The motor trade industry registered the largest monthly increase in March, registering an increase of 4%. The Bar sector also experienced an increase of 4% which was greatly aided by a bumper St. Patricks day for vintners.
This is exceptionally good news for the Irish economy as the Irish retail sector is one of its largest employers. With increased sales comes increased employment, which brings increased revenue into the government’s coffers (tax returns and VAT), less expenditure on the other side of the books in regards unemployment benefit. It also leads to more spending power amongst those returning to work, which in turn fans more growth, as more is spent in the local economy by those working in the Irish retail sector.
In theory, the extra revenue the department of finance receives from the above cycle could be used to stimulate more growth by reducing tax bands to ensure consumers have more spending power to create more employment in the Irish retail sector.
However there are external factors which could affect continued recovery, such as Greece leaving the Eurozone and our largest trading partner, the UK, deciding in a referendum to leave the European Union. This could have a huge impact on Irish exports, which is the engine of the Irish economy, if the UK were to leave the free-trade area. The outcome of next week’s election should be carefully monitored from an Irish perspective.