Davy cuts 2009 growth forecast to 2%

[spalpeen]

Davy cuts 2009 growth forecast to 2%
http://www.rte.ie/business/2008/0528/economy.html
Wednesday, 28 May 2008 09:18

"A report this morning from Davy Research says that economic growth next year will fall to 2% and it may not bounce back to normal levels of growth until 2010.
It also suggests that house prices have much further to fall and that unemployment will rise to 7% next year.
The stockbroking firm says it has cut its growth forecast for the Irish economy because conditions continue to get worse for consumers and because of the 'negative wealth effect'. It says that as the labour market weakens, consumers are finding it harder to get credit
Davy now expects GNP growth of 1% this year and of 2% for 2009, down from a previous forecast of 3.4%.
The stockbroking firm also believe that 2008 will not see the end of the building slump and it has hugely reduced the number of house completions it expects to see next year - from 40,000 to 25,000.
It says house prices will fall by 10.7% over the next year, and by 7.2% in 2009. It also forecasts that non-residential building will fall by 10% next year.
Davy says unemployment will have reached 7% by the end of next year from a current level of 5.5%."

Thats a slight change of tack from whats been pumped in the press this past while

[kerrynorth]

There is a big disconnect in their forecasts. If construction turns out as bad as they forecast we will be still stuck in recession as the consumer will be holding up the economy with spending as house values collapse. Plus unemployment would be nearer 10% not 7%.

[meriwether]

Can someone please ride to the rescue and dispel this..this filth with some happy anecdotes about jobs being created in Armitage Shanks in Leitrim?

[mairteenpak]

There will be no rescue other than a fall in asset costs that will restore competitiveness. Burying heads in the sand will not solve the problem. Stamp duty will have to go or the property crash will last seven years

[freedomlover]

Anyone who pays the slightest attention to a Davy forecast needs their head examined. They are probably the worst economic forecasters in the world. This is what they said in the Irish Times on 29 November 2001:

"Davy's 2001 GNP forecast may turn out to be a bit on the low side, conceded Mr Kelleher, but the real issue is that growth has slowed dramatically in the final quarter (of 2001) and next year (2002) will be 1 per cent, he said."

And what happened in 2002?

Well, GDP grew by 5% and GNP grew by 3%.

[mairteenpak]

When the Stockbroking arm of a major Irish bank forecasts doom most people will believe them.

Expect lots of negative equity, and loan defaults and a property supply that outstrips demand.

[digoutday]

more spin, more garbage, this is nothing more than guesswork.

[spalpeen]

Davy on the Irish economy
http://www.davy.ie/content/pubarticles/ ... 080527.pdf

RTE Broker Reports
Including:

Davy: Starting Points

Goodbody Stockbrokers: Morning Wrap

NCB Stockbrokers: Morning Notes

Gold Investments Market Update

all available at :
http://www.rte.ie/business/brokerreports.html

[HanleyS]

Anyone who pays the slightest attention to a Davy forecast needs their head examined. They are probably the worst economic forecasters in the world. This is what they said in the Irish Times on 29 November 2001:

"Davy's 2001 GNP forecast may turn out to be a bit on the low side, conceded Mr Kelleher, but the real issue is that growth has slowed dramatically in the final quarter (of 2001) and next year (2002) will be 1 per cent, he said."

And what happened in 2002?

Well, GDP grew by 5% and GNP grew by 3%.

We eased off on exports an concentrated in earnest in inflating the domestic bubble? That the answer you were looking for?

We might have been a whole lot better off if Davy's 2001 predictions had rung true. They couldn't have predicted the foolishness that followed.

[droghedasouth]

When the Stockbroking arm of a major Irish bank forecasts doom most people will believe them.

Expect lots of negative equity, and loan defaults and a property supply that outstrips demand.

Correct me if I am wrong, but didn't Davy's do an MBO a few years ago and buy themselves out from the Bank of Ireland.