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AMA
Research has recently published the 5th Edition of the report “Building
and Home Improvement Products Distribution in the Republic of Ireland”.
The report should be of particular interest to individuals and
institutional investors, and provides a comprehensive and easy to use
review of the rapidly evolving building materials sector.
The
rapid growth of the Irish economy over the last 10 years has led to a
boom in construction and house building. This strong growth in the
construction sector has resulted in increased sales of building
materials across the Republic and a 45% growth in the builders merchants
market over the past five years to reach almost €3.7bn in 2007 and an
increase of over 150% in the DIY and home improvement market over the
same period to reach an estimated value of €1.1bn in 2007.
The
substantial increases in the value of construction output have largely
reflected high levels of economic growth in the Irish Republic, with
several key drivers including EU supported infrastructure projects,
increases in new house-building, high levels of RMI and investment in
civil engineering projects. In addition, in January 2007 the second
National Development Plan was launched, with an estimated €184 billion
to be invested for the period 2007-2013 and is expected to support
public sector construction activity for the next 7 years.
Recent
years have seen big increases in construction costs with building
materials prices rising at a faster rate than labour costs. Much of this
increase is due to a rise in raw materials costs, while energy prices
are also increasing rapidly in 2007. As a result, the forecast for
building materials inflation for the full year is 6%
2007
has seen the Irish construction market enter a new phase in its
development and it is now widely believed that the ‘boom time’ for the
sector is now at an end and will be followed by a more sedate and
sustained period of growth over the coming years. Rising consumer
incomes and investment remain the drivers of growth, with funds from
maturing SSIA accounts and the election in 2008 expected to underpin
construction activity in the short term, while strong growth in
employment and consumption will boost the demand for non-residential
buildings.
Perhaps most significantly, the key sector which has underpinned growth
in the construction market in recent years – residential house building
– has now peaked at around 93,000 completions in 2006. Volumes have been
falling rapidly in late 2007, with forecasts for 2008 varying, but all
indicating a reasonably substantial decline, at least in the short term.
Distribution of building and home improvement products in Ireland is
dominated by the Grafton Group, following its acquisition of Heiton,
with a strong position in both the builders merchants and DIY sectors.
Other leading operators with expanding operations include Wolseley and
B&Q, while Travis Perkins and Homebase are now also expanding their
Irish DIY operations, which should result in a very competitive market
over the next 5 years.
AMA
Research’s “Building and Home Improvement Products Distribution –
Republic of Ireland 2008-2012” report is available in hard copy or
electronic format for £625 and can be ordered online at
www.amaresearch.co.uk or by calling 0871 3103450.
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