The two leading indicators of the state of the Island’s economy — retail spending and the Consumer Price Index showed general weakness in spending, but a Bermuda spared the ravages of inflation.

Consumer spending levels for 2001 were generally depressed compared to last year and fell further after the September 11 attacks.

The monthly Retail Sales Index (RSI) showed, after adjusting for inflation — and with the exception of January and March which saw increases of 5.9 and 0.1 percent respectively — lower sales levels.

January saw an increase of 5.9 percent over the same period last year, with the driving force behind the increase being a 25.5 percent year over year gain from the motor vehicle dealer and service station sector. And gross revenue flows for general retail also posted an 11.6 percent increase, which was attributed, in large part, to post-Christmas sales.

In February, the Island saw a 2.7 percent fall in retail sales, with general retail stores suffering the worst with a 5.5 percent drop in gross revenues.

In March, 2001 retail sales saw a marginal 0.1 percent increase over the year before with $47.3 million being spent in the Island’s shops. But, shops catering mainly to tourists continued to see a decline in the volume of their sales. The month also saw rebounded sales in the petrol and vehicle sector with a 7.1 percent increase being attributed to increased stock of new car models.

In April, May and June, sales dropped by five percent, four percent, 6.2 percent and 1.0 percent respectively as apparel stores suffered heavy drops in sales.

In comparison, the RSI for August reflected a more than 30 percent surge in motor vehicle sales over 2000. But, overall the Index fell by 0.1 percent, with retailers’ fears over lower sales being confirmed as spending on apparel and clothing accessories dropped 7.6 percent, and with more than 70 percent of stores in the sector reporting sales receipts below the previous year’s levels.

The September 11 attacks and the consequent drop in tourism and consumer confidence set the tone for the rest of the year. September’s RSI showed retail sales had fallen by 5.9 percent over last year.

The hardest hit areas were department stores and clothing shops, with sales in the apparel sector falling 17.3 percent over last September with 80 percent of stores in the sector experiencing lower sales than in 2000.

Vehicle sales also fell, by four percent, although the decline was attributed to lower stock levels as car shipments were delayed after the September 11 terrorist attacks.

But, some sectors did post sales increases: liquor and food sales saw a modest increase — 3.3 and 3.6 percent respectively — while hardware and building supplies saw a year-over-year increase of 4.7 percent.

In October, retail sales fell by 1.7 percent, with clothing stores feeling the greatest pinch as sales fell 14.2 percent.

Not all sectors felt the pinch. The construction industry appeared to still be on a high, as spending on hardware and building supplies coming in a strong 24.8 percent above 2000.

The Consumer Price Index, for 2001 showed the annual rate of inflation hovering at or around the three percent mark.

From January to May, inflation stood at 2.8 to 2.9 percent.

June posted the year’s record of 3.1 percent inflation. July’s rate of inflation was three percent, while August and September both recorded 2.8 percent.

The last Consumer Price Index released, by press time, was October 2001, which posted a three percent rate of inflation. This compared to a 2.1 percent inflation rate in the US, 1.9 percent in Canada and 1.6 percent inflation in the UK, for the same period.

While most sectors — including food, rent, clothing, tobacco and liquor, transport and vehicles, health and personal care, and education, recreation and reading and household — saw some level of price inflation over last year, the price for fuel and power contracted by more than four percent due to lower world market prices for oil.