Hardware Sector Set For Strong Growth as Economy Expands and Housebuilding Recovers
Ireland’s robust economic performance coupled with the ongoing recovery in the housebuilding sector are driving strong growth in the hardware sector. Despite the severe weather in the early part of the year the hardware industry, including retail, wholesale and manufacturing, is now responsible for direct employment of 19,000 and an overall economic contribution of €377 million.
With the economy forecast to grow by between 4% and 5% in the coming years the sector could create a further 2,000 jobs between now and the end of the decade, according to Hardware Association Ireland CEO Annemarie Harte.
Speaking at the Association’s 80th anniversary conference, Ms Harte said that this was a conservative estimate of potential growth. “The value and volume of hardware sales growth has traditionally outperformed retail sales growth during periods of strong housebuilding activity,” she said. “Despite very weak levels of activity in that sector in recent years hardware sales have recovered strongly. With housebuilding now thankfully picking up we can anticipate accelerated growth for the hardware sector and this will translate into increased employment.”
Ms Harte added that additional employment of 2,000 or more in the sector could be a conservative estimate. “According to the latest CSO figures the hardware sales grew by 5.1% in 2017,” she noted. “We can anticipate an increase in this figure during the next two years as a result of additional housebuilding. Forecasting is always an inexact science, but the hardware sector is a vital component in the construction industry supply chain and current trends point to robust and sustainable growth in both sales volumes and employment. Ten
per cent growth in both could be a conservative estimate.”
Home Renovation Improvement
DCU Associate Professor of Economics Tony Foley believes the industry could be in for a further boost in the coming months as the deadline for the Home Renovation Improvement (HRI) approaches. “The latest figures released reveal that the HRI has exceeded an estimated €1.85 billion in works since it was introduced in 2013, with the majority of the spend undertaken in just three counties; Dublin, Cork and Kildare. Home extensions, general repairs and renovations and window replacement top the list of works completed under the scheme, with an average spend of €16,187. We can anticipate an increase in applications for the schemes as we approach the December 31st deadline and this will drive further growth in the hardware sector.”
Calling for the scheme to be extended Ms Harte said: “Hardware and the related construction sector have a substantial economic impact and represent value for money on Government support. The HRI should be extended both to improve people’s lives and to stimulate further growth in the economy.”
Ms Harte also pointed to the risk to the sector posed by Brexit. “Our members source some 20% of their imports from the UK but it is the timber sector which faces the greatest challenges. The Irish timber sector contributes €2.6bn to the economy and sustains 12,000 full time rural jobs directly and indirectly. Over half of Irish sawmills’ output is exported, and 95% of those exports go to the UK. In addition, 90% of panel products produced in Ireland are exported, with two thirds going to the UK.
“Timber flows in both directions across the Irish Sea,” she continued. “The timber market in Ireland operates on an all-island basis with roundwood and processed timber flowing smoothly in both directions between Northern Ireland and the Republic. In these circumstances the government must pay particular attention to the needs of the sector in any Brexit negotiations.”
Concluding, Ms Harte said that the hardware sector was now in its fifth consecutive year of growth. “The Irish hardware sector returned to growth in 2013 and has maintained that trend ever since. I believe we can look forward to even stronger growth in the years ahead with the industry making a greater contribution to the economy as a result.”