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A number of factors have influenced the overall bathroom
products market in Ireland including levels of consumer confidence,
consumer spending and the amount of activity in the new house building
and RMI sectors. During 2004, the overall bathroom products market in
the Republic of Ireland was estimated to be worth around €129 million at
manufacturers selling prices.
In terms of individual
product sectors, it is estimated that showers (including trays,
controls and enclosures) with 35% of the market and sanitary ware with
29% of the market continue to dominate the industry's sales. However,
the accessories and brassware sectors are growing in significance with
around 15% of the market. As the popularity of showering increases,
sales of showers and shower products continue to outperform the baths
sector, which has around 21% of the market.
During 2004, the new build
sector for bathroom products was estimated to be worth €84
million at manufacturers selling prices and approximately 65% of the
overall total market bathroom products market. This share can be
attributed to the increased volume of bathroom products being installed
in new houses and the general shift to better quality and slightly
higher value fittings.
Key drivers for the new build
bathroom market include the current high levels of new housing
completions, the trend towards more en-suites in new
build homes and the higher specification of bathroom products now
being used by housebuilders both to add value and in response to
consumer demand.
The residential construction
sector is the main driver underpinning growth in the new build
bathroom products sector and has experienced unprecedented growth in
recent years. Residential completions currently total around 77,000 and
over
the past decade completion numbers have risen by around 200%, from less
than 27,000 dwellings in 2004.
The house building sector now accounts for over 60% of
total construction output and completions in 2005, although not reaching
the levels seen in 2004, are still forecast to reach 74,000.
The growth in semi-detached
homes, which now account for almost half of total unit completions,
heralds a trend away from apartment construction towards houses.
Although the average size of semi-detached and terraced homes has not
increased substantially, developers have increased the quality of
kitchen and bathroom fittings to add value, and regulations
governing disabled access has lead to an increase in size of
downstairs cloakrooms.
It is unlikely, however, that
the current levels of new housing output in the Irish Republic can be
sustained in the medium-term, and lower levels of housing supply
forecast over the next couple of years will lead to a decrease in
residential construction output and a gradual easing back of housing
developments
towards more sustainable levels of around 65,000-70,000 completions per
year from 2006 onwards.
The replacement market
for bathroom products in Ireland is estimated to be considerably smaller
at 35% and around €45m by value. It is estimated that whilst the average
life-span of a domestic bathroom is normally around 15 years, the
relatively recent age of most housing stock in Ireland leads to
consumers replacing sanitary ware on average, every 20-25 years. Around
44% of homes in Ireland have been built since 1981, which is reflected
in the much lower replacement market share compared to the UK, for
example.
The replacement market for
bathroom products has been driven by relatively high levels of consumer
confidence in recent years with consumer spending forecast to grow by
5.5% in 2005, the rise in popularity of home improvement programmes, a
growth in consumer credit and rising house prices leading to more
consumers using
the equity in their homes to fund improvements - a new bathroom, shower
room or en-suite are often seen as a good investment as well as a
practical improvement. Furthermore, the maturity of
Special Savings Investment Accounts (SSIAs) in 2006 will see the
release of an estimated €6 billion of consumer funds into the economy,
with many consumers using this money to remodel their homes with new
bathrooms and kitchens.
Imported
bathroom products were estimated to be worth around €33m during 2004
with exports worth around half the value of imports, accounting
for just €14.7m in 2004. The principal exporting company is
Qualceram Shires.
Offsite manufacturing
techniques in
the Irish housing market have now risen significantly from just 2% of
the total housing construction market to 16% over the past 10
years. The bathroom Pod is already a growth market in Ireland
and industry sources estimate that as many as 50% of new hotels rely on
Pod construction, while between 40% and 50% of apartment schemes are
benefiting from this method. Many house builders, including John Paul
Construction, P J Hegarty and Pierse Contracting are now
using pre-fabricated construction to install bathrooms in apartments and
smaller housing projects. Industry sources anticipate further activity
in the Irish bathroom pod market, with projected growth rates of 30%
per year. Leading suppliers to the Irish bathroom pod market include
Delta Off-Site Solutions, Fusion Building Systems, Polypod Ltd and
Qpods Ireland.
The bathroom products market in
Ireland is highly fragmented, with just one indigenous major bathroom
products manufacturer, Qualceram-Shires, dominating
production in the country and estimated to account for 33% of the total
market share. A number of smaller Irish companies manufacturing specific
products also collectively account for a similar proportion of the
market, with imports making up the rest of the share.
Major importing companies
include Armitage Shanks, Ideal Standard, Jacuzzi, Mira, Heritage
and Twyfords combining to account for around 26% of the market.
Other leading indigenous manufacturers of bathroom and sanitary ware
products include Image Showers, Vitra Ireland, Excel Plumbing
Products, Flair Showers, Killarney Plastics, Merlyn
Bathrooms and Sark International.
In terms of distribution
of bathroom products, the Builders Merchants dominate with around
45% market share, Leading builders merchants in Ireland include
Grafton Group Plc, Wolseley Plc, McMahon Group and
Dublin Builders Providers.
The bathroom specialists
have particularly benefited from the growth of higher specification and
quality bathrooms in recent years and are now estimated to account for
around 29% of the market in terms of distribution. Leading retail
specialists include Tubs and Tiles Ltd, Bathroom World, Euro
Bathrooms, Bathrooms and Tiles Direct and Irish International
Trading Corp (IITC).
The DIY sector accounts
for an estimated 21% of bathroom products distribution in Ireland and
has grown in recent years as a result of a buoyant house moving market
and the competitive pricing strategy adopted by major outlets such as
Homebase, B&Q and Woodies DIY. In addition the wide range of
products now available through the DIY sector has also supported growth.
Other channels of distribution,
including mail order, catalogue sales and direct supply from the
manufacturer, account for around 5% of the market in terms of
distribution.
It is forecast that the overall
bathroom products market will continue to grow at a reasonably stable
level in 2005 and 2006 at 4% per annum, and then by around 3% until
2009. The bathroom products market, as with most consumer durables, is
highly responsive to fluctuations in the economic climate with consumer
spending levels and confidence susceptible to interest rate rises and
fluctuations in the economy. The major area of change in the medium term
will be the switch in share from new build to replacement as the boom in
housing in the early – mid 1990s feeds through into the replacement
market.
A rise in earnings growth and
consumer spending, low inflation and low interest rates will all impact
favourably on the bathroom products market over the next few years.
However, with the current level of new build housing completions thought
to be unsustainable in the medium term, lower forecasts for the
residential construction over the next four years will impact upon the
bathroom products sector. Lower levels of house price inflation and
potential interest rate rises may have a negative influence on both the
new build and RMI sectors in the medium-term, and, together with the
threat to
low-mid skill jobs, largely in manufacturing and many
firms transferring production overseas, these factors are likely to have
a restraining effect on growth in the bathroom products market.
Therefore,as
indicated above, our forecasts indicate moderate market growth of
between 3-4% over the next four years, with an estimated market
value of €152 million forecast for 2009. | 
