It’s been a rough go for UK retailers over the past 12 months, but it looks like the toy category is holding up in the struggling British economy.

With the UK toy market sitting at US$4.1 billion, The NPD Group found that toy sales in the territory grew 7% by volume last year. However, despite an increase in toy unit sales, revenue fell by 2% from 2007’s annual haul. The figure still beats out the 3.3% dip experienced in overall UK retail sales as recorded by the British Retail Consortium.

For the holiday season, sales volumes increased 12% in December, with nine of the 11 toy supercategories (action figures and accessories; arts & crafts; building sets; dolls; games/puzzles; infant/preschool; youth electronics; outdoor & sports toys; plush; vehicles; all other toys) seeing growth. Meanwhile, six of those supercategories (including action figures and accessories, arts & crafts, building sets, infant/preschool, plush and all other toys) saw increased sales value, with building sets seeing the highest spike at 13%.

There was also good news for the licensing industry, as licensed toy sales were up 8% this year versus 2007, making licenses now responsible for 31.6% of total toy sales in the UK. The top-10 licensed properties are Star Wars, In the Night Garden, Thomas & Friends, Ben 10, High School Musical, Bratz, Barbie, Cars, Disney Princess and WWE/WWF.

The NPD also found Mattel, Hasbro, Vivid Imaginations, Character Group, Lego, Vtech, Bandai, MGA, Tomy and Halsall comprised the top-10 UK toy manufacturers, year-to-date as of December 2008.