First Economic Impact Report for Ireland Launched

by | Sep 25, 2020

Our Affiliate HABIC, the Hair and Beauty Industry Confederation, have launched the first fully comprehensive report of the hair and beauty industry in Ireland.

 

The report examines employment levels, the economic and financial contribution of the industry, trends, issues and policy support for the sector.

 

Image credit: HABIC

 

HABIC reports that over 25,000 people were employed in over 9,000 hair and beauty salons across Ireland in 2019. The reports states that the industry ‘is an important presence on the streets of the villages, towns, and cities all over the country’.

 

Between 2014 and 2019, turnover is estimated to have increased by 26.4%. Total turnover for hair and beauty services in 2019 is estimated to be €1.44 billion. It is more difficult to establish the total number of people employed within the hair, skincare and cosmetics product sector of the industry, however, HABIC reports that the sector had a turnover of €1.2 billion in 2019. Using this figure, HABIC have estimated that employment is at 5,000.

 

The Total Economic Contribution of the Hair & Beauty Sector:

  • The Direct Contribution to GDP of the Hair and Beauty Sector based on output value of €2.6 billion is estimated at €1.47 billion.
  • The Indirect Contribution to GDP of the Hair and Beauty sector based on output value of €2.6 billion is estimated at €546 million.
  • The Induced Contribution to GDP of the Hair and Beauty sector based on output value of €2.6 billion is estimated at €780 million.
  • The total contribution to GDP of the Hair and Beauty sector is estimated at €2.79 billion.
  • The industry supports 30,800 jobs directly and 18,480 jobs indirectly in the economy. The total employment supported by the Hair and Beauty sector is estimated at 49,280 jobs. This is equivalent to 2.1 per cent of total employment in the economy at the end of 2019.

 

Key Challenges and Issues for the Industry:

  • Direct impact of COVID-19 and physical distancing on the sector.
  • The increase in the VAT rate from 9 per cent to 13.5 per cent for hairdressing services in Budget 2019.
  • The ongoing growth of the black market for hair and beauty services, which is now likely to be somewhere between 30 per cent and 50 per cent of the turnover of the legitimate sector and is worth at least €400 million and costs the Exchequer at least €55 million. This issue must be addressed by the authorities to protect legitimate operators and create a level playing field.
  • The abolition of the ‘training rate’ in March 2019.
  • The more challenging economic environment post-COVID.
  • The growth of environmental customer preferences.
  • Creating an education and training model of excellence in the sector.

 

Policy Support Essentials:

  • The growing and very damaging black market in hair and beauty must be addressed in a meaningful way.
  • An amendment to the current apprenticeship model, to bring equality to pre and post 2016 apprenticeships, this should be achieved by paying an off the job training allowance as per pre-2016 craft apprenticeships.
  • Re-introduction of training rates for structured training programmes delivered in the workplace by employers.
  • Additional support for a CPD programme, the development of a CDP framework and enhanced education qualifications with a strong focus on business development, management, and leadership.
  • Reform of the commercial rent system should become a policy priority for the new Government. In many countries, ‘% turnover rents’ are the norm.

 

Policy Supports Essential in the Context of COVID-19:

  • The VAT rate for hair and beauty should be cut to 5 per cent until the end of 2021, and then revert on a permanent basis to the 9 per cent rate that prevailed prior to the increase in Budget 2019.
  • Continuation of the wage subsidy scheme.
  • Financial support to cover commercial rates is essential.
  • Business Recovery Supports as per Small Business Recovery Plan

 

To access the full Economic Impact Report, click here.

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