Davy Stockbrokers is predicting housing supply will increase to 75,000 units a year. That’s the good news. The bad news is that the enhanced level of supply won’t come until 2035.That long wait will leave a housing shortfall against demand of more than 200,000 homes.“While supply is improving, it is still expected to remain well below underlying demand, leaving a housing shortfall of circa 210,000 by 2035 even with output up to 75,000 a year by then,” the brokerage said in its latest economic assessment.On the back of weaker commencements, Davy also downgraded its forecast for housing supply for next year to 44,000 (down from 50,000) and 42,000 in 2028.There was, however, more upside than downside in its latest batch of forecasts.Against a backdrop of continuing global uncertainty, ratcheted up in recent days by breaches of the US-Iran peace deal, the brokerage upgraded its growth outlook for the Irish economy.Davy said Ireland’s economy continues to outperform expectations “and we now expect real GNI* growth [the Central Statistics Office’s bespoke measure of activity] to average 5.1 per cent a year to 2028″.“Strong productivity, FDI, infrastructure/homebuilding and population growth with a resilient labour market are behind this,” it said, noting that Ireland’s real per-capita growth ranked in the top decile of developed economies.It cautioned that gross domestic product would be volatile as a result of pharma exports, “and another contraction this year looks likely before a recovery next year and in 2028″.Nonetheless the stronger growth profile means healthy budget surpluses out to 2028. “Even if the surplus falls temporarily, we think the Government should continue with its plans to invest and contribute to the sovereign wealth funds,” it said.While Ireland’s fiscal position continues to appear strong on paper, it is increasingly dependent on potentially volatile multinational taxes.At the same time there has been a rapid acceleration in spending. Not for the first time, Ireland’s economic outlook is positive but with caveats.