Goodbody Stockbrokers yesterday published their first quarter 'Health Check' which sets out their assessment of momentum in the domestic economy. They forecast core domestic demand growth of 3.6% against a backdrop of increasing risks to growth that are beyond Irish control.
Goodbody predict consumer spending, buoyed by ongoing real disposable income growth and strength in the labour market will make a significant contribution to growth. Meanwhile, they expect
construction and housing to step up a gear with activity ramping up to meet burgeoning demand.
Their house completion forecast is 18,500 (from 16,500) - well below the medium-term demand of circa 31,000. They expect that new mortgage lending will continue to grow resulting in the first net mortgage lending increase since 2009.
According to Goodbody Stockbrokers, "Turning to the downside risks, Ireland faces the increasingly likely ‘hard Brexit’ and proposed US corporate tax reforms. Amongst other things, US President-elect Donald Trump proposes to cut US corporation tax to 15% and has broad support for doing so. This would represent a significant erosion in Ireland’s comparative advantage in attracting FDI."
They added, "Despite these and other risks, we expect Ireland to rank amongst the top performers in the league tables of EU economic growth once again in 2017."