Housebuilding recovery ‘could create 2,000 jobs in hardware sector’

Sales have recovered strongly, outperforming retail sales, hardware lobby group says

The Hardware Association Ireland has outlined risks to the timber sector as a result of Brexit. Photograph: iStock

The Hardware Association Ireland has outlined risks to the timber sector as a result of Brexit. Photograph: iStock

 

Some 2,000 jobs could be created in the hardware sector between now and 2020 as the Republic’s robust economic performance coupled with the housebuilding recovery drive growth in the sector.

A forecast from Hardware Association Ireland (HAI) suggests economic growth of between 4 and 5 per cent could boost employment in the sector to 21,000 jobs. The industry is currently responsible for direct employment of 19,000 people and is estimated to contribute about €377 million to the economy.

Annemarie Harte, HAI chief executive, said the forecast of 2,000 additional jobs is a “conservative” one, noting that hardware sales grew 5.1 per cent in 2017.

Volume

“The value and volume of hardware sales growth has traditionally outperformed retail sales growth during periods of strong housebuilding activity.

“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,” she explained.

Additionally, the sector is expected to get a boost associated with the Home Renovation Incentive (HRI) scheme. The HRI scheme enables homeowners claim tax relief on repairs, renovations or improvement work carried out on their main home or rental property.

The HRI is paid in the form of a tax credit at 13.5 per cent of qualifying expenditure and will cover work done up until December 31st this year.

“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,” said Dublin City University (DCU) associate professor of economics Tony Foley.

“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,” he added.

Risks

Ms Harte, speaking at the HAI’s 80th anniversary conference, also outlined risks to the sector posed by Brexit. She said the timber sector in particular was facing considerable challenges.

“The Irish timber sector contributes €2.6 billion to the economy and sustains 12,000 full-time rural jobs directly and indirectly. More than half of Irish sawmills’ output is exported, and 95 per cent of those exports go to the UK. In addition, 90 per cent of panel products produced in Ireland are exported, with two thirds going to the UK,” Ms Harte said.

She urged the government to “pay particular attention to the needs of the sector” considering the current position is one where roundwood and processed timber flows smoothly between Northern Ireland and the Republic.