A record 100,000 homes will be completed this year, according to estimates published yesterday in Bank of Ireland's Irish Business Review.
On the basis of increased activity in the construction sector in the first quarter of 2006, the bank has revised its original forecast of completions for the year up from 85,000 to 100,000 - significantly above the 2005 figure of 81,000. The outlook for the retail sector is also positive, due to an acceleration in household spending.
Pat Gaynor, managing director of Bank of Ireland corporate banking, said spending was being driven not by personal borrowings but rather by a growth in household income, which he predicted would rise by 9 per cent in 2006.
Increased consumer spending has contributed to a turnaround in the performance of pubs over the past 12 months, according to the review, with the most recent data showing an annual growth of 2.5 per cent.
Industrial output declined in the first quarter of 2006 but is expected to recover over the remainder of the year on the back of increased euro zone and UK demand.
The agricultural sector is experiencing a slowdown in income growth, following "exceptional growth" in 2005 due to "overlapping subsidy payments and the introduction of the Single Payments Scheme".
Rising energy prices are presenting a major challenge to Irish business, according to Mr Gaynor, who advised that "treasurers and finance directors now need to utilise . . . hedging instruments to limit their exposure to energy prices".
