The volume of retail sales rose 2.9 percent in May, boosting the Island's retail sector after a lacklustre April.

But overseas purchases by residents returning to the Island also jumped in the month, soaring 46.1 percent over the same month in 2003.

The value of retail sales rose 6.4 percent to $49.8 million in May, as construction spending jumped again after falling off in April.

After taking the 3.4 percent rate of inflation into account for May, the volume of sales rose 2.9 percent. The volume of sales in April rose by just 0.5 percent after averaging 5.16 percent through the first three months of the year.

A Government statement said the building and hardware sector of the Index reported a 20.9 percent increase in May after a marginal increase in April. Government attributed this to a number of major commercial and residential building projects getting underway during the month.

Liquor sales also jumped by 10.1 percent in the quarter, but part of the increase was attributed to a 6.5 percent rise in prices in the month.

Similarly, a 9.8 percent increase in fuel sales was driven by the soaring world cost of oil.

However, motor vehicle dealers reported a continued surge in sales after a weak 2003. Improved inventories and demand for new models sparked a 7.3 percent increase in sales, Government said.

All other sectors reported increases of at least 2.9 percent over the May last year.

However, spending increases were not restricted to local stores. Government said the value of overseas purchases jumped 46.1 percent - the highest monthly increase in at least 20 months - to $4.69 million.

That marked the fifth straight month in which overseas purchases have increased by at least 26 percent and the second month that they have increased by more than 40 percent.

"The volume of returning resident who declared overseas purchases rose by approximately one-third or 34 percent in May, contributing to the surge in spending," Government said.

Gorham's spokesman Henry Durham said: "In May, we had a pretty good month. There is a lot of demand from contractors. Building is up and the DIY-ers (do-it-yourselfers) seem to be doing quite a bit of work as well.

"It hasn't really slowed down since Fabian."