Economic recovery continues

ECONOMIC recovery is taking root and will lead to better-than-expected growth figures this year, according to Davy Stockbrokers’ latest review.

Davy upgraded its growth forecasts on foot of strong economic indicators over the summer. Tax receipts running ahead of schedule; continuing good news on the jobs front, and increasing demand for personal borrowing provided comfort that the economic recovery that began last year had been sustained throughout the summer.

Davy expected gross national product (GNP) to increase by 4.6% this year, up from its previous forecast of 4%. The predicted hike in gross domestic product (GDP) was also increased from 3.5% to 4.2%. The construction sector was “particularly buoyant” in recent months, with employment in the sector surging by 7.6% year-on-year in the period between April and June. Construction employs 206,000, or 11% of the total workforce and 80,000 more than in 1998. But Davy warned that the sector would suffer from a slowdown in new housing. It expects overall construction of new homes to fall from a record 80,000 this year to 70,000 in 2005.