Higher sales of liquor, cars and building materials contributed to consumers spending $56.4 million on retail sales in May, the highest level of spending by consumers so far this year.

Sales for the month were 4.8 percent or $2.5 million higher than the $53.9 million in retail sales recorded for May, 2005. With annual inflation recorded at 2.7 percent in May, the volume of retail sales increased two percent.

The 4.8 percent increase in retail sales in May followed two consecutive months of retail sales declines.

Alcohol sales rose 10.8 percent in May, continuing a 16 month trend. The 10.8 percent increase in sales recorded in May, 2006 was significantly higher than the 8.9 percent average recorded in 2005.

That increase is likely to continue, said Burrows Lightbourn Ltd. manager Richard Hartley, who added: ?Sales are going pretty well for the holiday period. We are rushed off our feet at this time of the year and there is often a mad rush the day before the annual event as we find that people tend to order for immediate needs.

?During the Newport Bermuda event we received a boost with an influx of visitors. I was amazed at how many people participated. There were thousands of people here with friends and families visiting the Island.?

Mr. Hartley said he is expecting that this year?s sales will be up over last year and this is a reflection of strong visitors arrivals which has trickled down to bars and restaurants.

?We are seeing a steady increase in wine sales and the wine sector is the buoyant part of the business.

?There has been a steady decline in spirits which has been a continuing trend and the beer business has been steady with no increase in imports of beer.?

Gross receipts for food stores increased 9.9 percent in May, in part because there was an extra shopping day as well as a 1.4 percent rise in the price of food.

Retailers of motor vehicles experienced positive sales for the month following two consecutive months of decline.

The motor vehicles sector grew a 12.1 percent due to increased consumer demand along with higher stock levels of current vehicle models.

Retailers in the building material and hardware sector reported a sales gain of 10.8 percent for the month of May ? the fourth month of double digit sales increases in 2005.

Higher levels of construction activity in the economy led to strong sales for building and hardware vendors, the key suppliers to the construction industry, the Department of Statistics said.

Retailers of furniture, appliances, electronics and pharmaceuticals have experienced positive sales gains consistently since November 2004. Gross revenue flows for this sector advanced a further 17.1 percent during the month.

Despite the overall increases, overseas purchases continued to climb.

Residents returning to the Island from business and vacation trips declared overseas purchases of $5.7 million, roughly $600,000 or 12.2 percent higher more than in May, 2005.

Overseas spending represented 9.2 percent of total retail sales in May, up from 8.6 percent recorded last year.