Outlook for future
G.D.P. in Ireland grew by 6% in 2006, substantially higher han was expected this time last year.
Recent indicators from the Central Statistics Office and the Economic and Social Research Institute predict that growth will slow to 5.4% in 2007 and 3.9% in 2008. Going forward, such predictions are certainly not a platform for any kind of pessimism. It is important to remember that our growth levels continue to be approximately twice the EU average. The underlying health of the Irish economy remains robust and Ireland's positive demographics point to continued growth.
While housing completions will be down in 2007, given the rate of house price inflation in recent years and seven consecutive interest rate increases, a slowdown in housing output was somewhat inevitable. Even against such a background there is still room for much optimism in the housing market. The interest rate cycle is now close to topping out and it is well worth remembering that interest rates are still well below the 4.5% level at which we entered the euro in 1999. The moderation in house prices is welcome and will allow the market to stabilise. The main underlying factors supporting the housing market remains strong. Our ability to create approximately 90,000 new jobs in 2006 coupled with net migration of 75,000 people into Ireland together with net natural population growth of 35,000 augurs well for the housing market over th next decade.
Other sectors of the construction industry, including the office, retail and industrial markets, continued to perform extremely well in 2006 together with the economy as a whole. Retail sales increased at about twice the rate in the UK. It was also an excellent year for the office market with take up of almost 210,000 sq m beng achieved, a 50% increase on 2005. On the industrial front, record take up levels in 2006 brought the industry vacancy rate to below 10% for the first time this decade. All of this gives much cause for optimism and, while it is always prudent to take cognisance of challenges and potential pitfalls, it is simply not productive to continuously dwell upon them, as some commentators seem bent on doing.
In 2006 P. Elliott & Company demonstrated once again our ability to deliver consistent growth in turnover and profits. We are very much aware that there always have been and will continue to be the normal challenges faced by any company going forward. With that said, however, we remain confident of our ability to take advantage of many opportunities which will continue to be available to us in 2007 and beyond, having continued to provide the investment platform necessary to do so.
The success of P. Elliott & Company is very much attributed to the dedication and ability of the people who manage and work in our different operations. As our company continues to grow, we steadfastly focus on attracting, motivating and retaining talented leaders at all levels of our company. There is a culture of hard work, dedication, performance and achievement throughout the company and this will ensure that, whatever the economic climate, P. Elliott has the motivation and capability to deliver superior operational performance and growth in the years ahead.
Our ongoing focus on increased turnover and new development projects matched with cost effectiveness across all of our operations will lead to further sustained progress in the years ahead. 2007 will also see us expand into further new businesses which will have important synergies with our core construction and development operations while, at the same time, achieving a more diversified business offering. In addition, we will derive major benefits from our acquisition spend in 2006 and this, together with our continued increase in earnings durning the year, will enable us to expand futher in 2007 and beyond. Once again we are looking forward to the futuer with confidence, enthusiasm and optimism.
