Davy Stockbrokers has lowered its economic growth forecast for this year to 4.5% from the previous 5%, blaming a slowdown in building activity.
The broker's latest forecast says the number of new homes built this year will fall by 8,000 to 80,000 - a 9% decline in output and a bigger drop than it previously forecast. But Davy says consumer spending and other areas of the construction sector will again perform strongly.
It has kept its forecast for GNP growth in 2008 at 3%. Davy believes consumer spending growth will slow sharply in that year as the impact of SSIAs disappears.
