A leading stockbroking firm has cut its GNP growth on the back of lower than expected house completion data.
Rossa White of Davy Research said housing starts were now running at an annualised rate of 44,500 compared with 94,500 12 months ago and had fallen 58 per cent in August.
As a result, Davys are cutting their housing forecasts to 75,000 completions this year and 55,000 completions in 2008. The figure for next year is 10,000 houses, or almost 20 per cent lower than earlier predictions.
Davys said investment in renovations and extensions to houses remained strong, accounting for about one-sixth of residential investment and that this was off-setting some of the decline in activity.
Mr White said the revised provisional estimate was now for GNP growth of 4.25 to 4.5 per cent in 2007 and 2.5 to 2.75 per cent in 2008.