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This report covers: Builders Merchants, DIY Multiples,Independent Hardware, DIY, Do It Yourself, construction trends, housing, consumer spending, Decorating, Bathrooms, Garden/Leisure, Hardware, Kitchens, Adhesives/Sealants, Electrical, Heating/Plumbing/Drainage, Roofing/Insulation, Bricks, Timber/Glazing, Cement/Plaster, Eire
Companies covered include: The Heiton Group, Grafton Group Plc, Brooks Group PLC, Dublin Providers
Key Areas Executive Summary Table of Contents
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MARKET OVERVIEW - construction trends, building materials, market size etc.
DISTRIBUTION - role of Builders Merchants, DIY Multiples, Independents etc.
SUPPLIERS - retail structure,key players, shares, trends etc.
While growth in the UK has been relatively slow, the market for building materials in Ireland has grown by over 100 percent in the last 5 years. Construction in Ireland has benefited strongly from the buoyant economy and accounts for around 14 percent of GDP, compared to just 7 percent in the UK. The reports illustrate recent market trends, key influencing factors, distribution structures etc, highlighting the contrasts between Ireland and the UK in recent years, with forecasts of future developments.
Republic of Ireland
Background Economic/Construction
- Broad review of social, economic and construction background in Ireland.
- GDP, population statistics - Ireland fastest growing economy in the European Union.
- Construction - Overall construction statistics, 1994-1999 - analysis of key growth sectors - housing, commercial, industrial, infrastructure, health and education etc. Opportunities and threats to current construction boom.
- Housing - volume growth since 1994 (over 100 percent), key influencing factors, future prospects for housing market, geographic distribution of housing.
Builders Merchants
- Market size - value growth 1994-99. Forecasts for 2000-03.
- Key factors influencing market for building materials.
- Key Builders Merchants - major players, size, shares, market structure, number of outlets, changing degree of concentration in sector. Comparisons with UK market
- Future prospects for sector-key trends, market structure etc..
DIY Sector
- Market size - value growth 1996-99. Forecasts for 2000-03.
- Key influencing factors - economic, housing, emphasis on private RMI and DIY activity etc.
- Major DIY outlets - role of Multiples, leading players, market shares, structure, number of outlets etc. Comparisons with UK market.
- Role of Wholesalers/Distributors-links with Independents-a stronger sector in Ireland.
- Future prospects for sector-key trends, market structures etc.
General
- Sources of further information.
- Overall future prospects for construction and distribution of building and home improvement products.
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The Republic of Ireland has a relatively small population of around 3.6 million, but is the fastest growing economy in the European Union. GDP growth has averaged around 9 percent over the last 5 years, but construction activity has been even more buoyant, with average annual increases in output at over 15 percent.
While market conditions in Ireland in the early - 1990s were relatively depressed, construction output has grown by 141 percent since 1994 to reach an estimated value of IR£10.2 billion (equivalent to around £8.5 billion Sterling). In terms of comparison with the UK, construction accounts for around 14 percent of GDP in Ireland, compared with 7 percent of GDP in the UK.
Further growth is anticipated over the next 3 years though at lower rates. The housing market, in particular, is generally regarded to be overheating, with recent annual growth rates in house prices of over 20 percent in the Dublin area, which is beginning to have some inflationary effects.
Construction has particularly benefited from inward investment from US companies, which has stimulated demand for commercial and industrial buildings - both sectors have seen construction growth in excess of 150 percent over the last 5 years. While Dublin has been the major focus for inward investment, all areas of the country have benefited to some extent.
Infrastructure, health and education and a general boom in RMI work have also been major contributors to the growth in construction output. The volume of new housing has also grown rapidly from 19,500 completions in 1990 to over 48,000 in 1999. This level is over 25 percent of the UK new housing output, while the population proportion is only 7 percent - this figure is set to rise further as demand for new housing from younger age - groups and returning workers continues to rise.
The Builders Merchants ("Builders Providers" in Ireland) market is estimated at IR£1.55 billion in 1999, a growth of over 100 percent since 1995. Growth is forecast to continue over the next few years in line with general construction activity. The Builders Providers market in Ireland is dominated by 2 major groups - Grafton and Heiton - who both also have substantial merchanting operations in the UK, though independents also account for a reasonable share.
The DIY retail market is estimated at around IR£200 million in terms of home improvement products. Again, there are 2 major national groups - Woodies and Atlantic - who are both owned by the major national merchanting groups.
The overlap of ownership between the major merchanting and DIY groups in Ireland has prevented an aggressive 'price war' between the sectors, as occurred in the UK. Only Wolseley, of the major UK merchants operate in Ireland, following their acquisition of Heatmerchants.
The DIY market remains much more fragmented than the UK due to a more dispersed population, planning restrictions on out-of-town developments, and a higher emphasis on local product range and service in Ireland.
Wholesalers, therefore, play a more prominent role, with the majority focusing on specific product ranges and covering the whole country, rather than a more geographic focus which is more typical in the UK.
Prospects for the construction industry in Ireland remain favourable, at least in the short-medium term. Concerns with the economy overheating as inflation rises in early 2000 are mounting, but new housing and investment in commercial, industrial and infrastructure projects are anticipated to provide good opportunities for building material suppliers in the medium term.
Longer term concerns relate to problems controlling the rate of inflation since entry into the single currency. Several government initiatives have been introduced in early 2000, but it is too early to forecast their effectiveness in maintaining strong growth without higher inflation.
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| 1. | Introduction | 5 |
| 2. | SUMMARY | 7 |
| 3. | ECONOMIC & SOCIAL BACKGROUND | 9 |
| 3.1 | BACKGROUND | 9 |
| 3.2 | ECONOMIC BACKGROUND | 10 |
| 3.3 | DEMOGRAPHIC PROFILE | 18 |
| 3.3.1 | Population | 18 |
| 3.3.2 | Population by Area | 19 |
| 3.4 | CONSTRUCTION | 21 |
| 3.4.1 | The Total Construction Market | 21 |
| 3.4.2 | Non-Housing Construction | 24 |
| 3.4.3 | Construction Employment Levels | 27 |
| 3.5 | THE HOUSING MARKET | 28 |
| 3.5.1 | Completion | 28 |
| 3.5.2 | House-Building Completions Per Capita | 31 |
| 3.5.3 | Value Of House-Building Output | 33 |
| 3.5.4 | Overall Housing Market | 34 |
| 4. | TRADING WITH COMPANIES IN THE REPUBLIC OF IRELAND | 36 |
| 4.1 | THE EURO | 36 |
| 4.2 | TAXATION AND LEGISLATIVE DIFFERENCES | 37 |
| 4.2.1 | Income Tax | 37 |
| 4.2.2 | Capital Gains Tax | 38 |
| 4.2.3 | Corporation Tax | 39 |
| 4.2.4 | Value Added Tax | 39 |
| 4.3 | CULTURAL DIFFERENCES | 39 |
| 4.3.1 | Language | 39 |
| 4.3.2 | Society | 40 |
| 4.4 | BUILDING MATERIALS | 40 |
| 5. | THE BUILDERS MERCHANTS MARKET IN IRELAND | 41 |
| 5.1 | OVERVIEW | 41 |
| 5.2 | TOTAL MARKET SIZE | 43 |
| 5.3 | MARKET STRUCTURE | 46 |
| 5.4 | KEY COMPANIES | 48 |
| 5.4.1 | The Heiton Group | 49 |
| 5.4.2 | Grafton Group Plc | 50 |
| 5.4.3 | Brooks Group Ltd | 51 |
| 5.4.4 | Dublin Providers | 51 |
| 5.4.5 | Others | 51 |
| 6 | FUTURE PROSPECTS | 64 |
| 7 | SOURCES OF OTHER INFORMATION | 66 |
List of Tables and Charts |
Page |
|
|---|---|---|
| Chart 1 | CONSTRUCTION OUTPUT IN IRELAND - 1994-2003 | 7 |
| Table 2 | IRELAND – ANNUAL AVERAGE percent CHANGE IN REAL GDP 1993 – 2003 | 10 |
| Table 3 | IRELAND – ANNUAL AVERAGE percent CHANGE IN CONSUMER PRICES 1993 – 2003 | 12 |
| Table 4 | IRELAND – UNEMPLOYMENT LEVEL 1993 – 1998 ( percent) | 13 |
| Table 5 | WORKING POPULATION OF THE REPUBLIC OF IRELAND 1990-1996 (1000S) | 14 |
| Table 6 | TOTAL POPULATION OF THE REPUBLIC OF IRELAND BY AGE GROUP 1996 | 16 |
| Table 7 | TOTAL PERSONAL CONSUMPTION OF GOODS AND SERVICES IN THE REPUBLIC OF IRELAND 1991-1997 (£ BILLIONS) | 17 |
| Table 8 | POPULATION OF THE REPUBLIC OF IRELAND 1990-1998 (MILLIONS) | 18 |
| Table 9 | REPUBLIC OF IRELAND PROVINCE SIZES BY AREA AND POPULATION 1996 | 19 |
| Table 10 | PRINCIPAL TOWNS IN THE REPUBLIC OF IRELAND | 20 |
| Table 11 | VALUE OF CONSTRUCTION OUTPUT IN THE REPUBLIC OF IRELAND 1994-2003 AT CURRENT PRICES | 21 |
| Chart 12 | THE TOTAL CONSTRUCTION MARKET IN THE REPUBLIC OF IRELAND BY SECTOR 1998 BY VALUE (IR£) AT CURRENT PRICES. | 23 |
| Table 13 | VALUE OF OUTPUT FOR INDUSTRIAL CONSTRUCTION 1994-1998 AT CURRENT PRICES (IR£MILLION) | 24 |
| Table 14 | VALUE OF COMMERCIAL CONSTRUCTION OUTPUT IN THE REPUBLIC OF IRELAND 1994-1998 AT CURRENT PRICES (IR£) | 25 |
| Table 15 | VALUE OF HEALTH AND EDUCATION CONSTRUCTION OUTPUT IN THE REPUBLIC OF IRELAND 1994-1998 AT CURRENT PRICES (IR£) | 26 |
| Table 16 | NUMBER OF PEOPLE EMPLOYED IN THE CONSTRUCTION INDUSTRY 1994-1998 | 27 |
| Table 17 | NEW DWELLINGS COMPLETED 1990-1998 (VOLUME OF UNITS) | 28 |
| Chart 18 | NEW DWELLINGS COMPLETED 1990-1998 | 29 |
| Table 19 | NEW HOUSE-BUILDING LEVELS PER 1,000 PEOPLE IN THE UK AND THE REPUBLIC OF IRELAND 1993 & 1998 | 31 |
| Table 20 | VOLUME OF NEW HOUSING COMPLETIONS IN THE REPUBLIC OF IRELAND PER COUNTY IN 1998 | 32 |
| Table 21 | VALUE OF HOUSING CONSTRUCTION IN THE REPUBLIC OF IRELAND 1994-1998 AT CURRENT PRICES (IR£) | 33 |
| Table 22 | AVERAGE SELLING PRICES OF NEW AND SECOND HAND HOUSES IN THE REPUBLIC OF IRELAND 1993-1997 (IR£) | 34 |
| Table 23 | PERSONAL INCOME TAX ALLOWANCES IN THE REPUBLIC OF IRELAND | 38 |
| Table 24 | TOTAL MARKET SIZE FOR BUILDERS PROVIDERS IN THE REPUBLIC OF IRELAND 1990-2003 (IR£MILLIONS) | 44 |
| Chart 25 | BUILDERS MERCHANTS MARKET - UK AND IRELAND - INDEX OF SALES 1994-2003 | 45 |
| Chart 26 | BUILDING PRODUCTS DISTRIBUTION STRUCTURE | 47 |
| Table 27 | HEITON HOLDINGS PLC – TURNOVER FROM IRISH BUILDERS MERCHANTING AND HIRE DIVISION 1995 – 1999 (IR£MILLIONS) | 50 |
| Table 28 | TOTAL MARKET SIZE FOR DIY AND HOME IMPROVEMENT PRODUCTS IN THE REPUBLIC OF IRELAND 1996-2003 (IR£MILLIONS) AT RETAIL SELLING PRICES | 56 |
| Chart 29 | DIY MARKET - IRELAND AND UK 1996-2003 (1996 = 100) | 59 |
| Chart 30 | RETAIL DISTRIBUTION - LEADING RETAILERS BY SHARE | 60 |
Text © 2000 AMA Research
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Last updated by Jacob van Eldik 26th February 2000