Economic growth will slow to 2.1% this year, according to stockbroker Davy.
The forecast - for GNP growth - is one of the most pessimistic outlooks so far, but Davy says the economy remains strong. It has predicted that growth will bounce back in 2009.
Despite an expected 40% fall in house building this year, Davy says other sectors are doing well. It says agriculture will have a good year as food prices rise globally, while exports will also be healthy.
But growth in employment will only be 1%, and the number of people out of work will grow.
Davy's report says cuts in interest rates are unlikely. But it says that once the economy gets through the housing downturn it will return to normal growth rates in 2009.
