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The Economic and Social Research Institute (ESRI) has dispelled some of the seasonal cheer with its forecast today that the rate of economic growth in 2008 is shaping up to be the slowest since 1992. The principal cause of the slowing national growth rate is the steep decline in house building activity. House completions are now forecast to fall from a peak of 88,000 in 2006 to 55,000 next year. Since house building accounts for 15% of total activity in the economy, a sharp decline in building output acts to drag down national economic performance.

The ESRI is now forecasting that the economy will grow by 2.3% next year. The speed of the decline in the economy's fortunes can be judged from the fact that, as recently as last year, the economy was expanding at a rate of 6.5%. The forecast deceleration in the pace of economic growth will cause employment to mark time and the number of people unemployed to rise to a projected 130,000, a level not seen since 1998.