We rarely support retention and are even less enthused about holding children like your son back when it is suggested for non-academic reasons. Young children change so rapidly. Just because your son does not seem to be ready now in some areas for first grade doesn't mean he won't be ready in the fall. Your son has six months before the start of the next school year. Wait until then before you make your final decision.
Many young children are shy. The teacher should be trying to help him by letting him work both in small groups and one-on-one with an outgoing child. At the same time, you should invite a classmate with whom he feels friendly to play sessions at your home so he will begin to have classroom friends.
Do spend time now and this summer helping your son overcome his fear of trying new things. Ask his teacher about the tasks he is reluctant to do and show him ways to handle them. Teach him to break tasks down into manageable units so he will not be overwhelmed. This will give him confidence in his ability to do things and help to eliminate some of his fears.