CRH may be hit by a predicted $22.7 billion shortfall in US government funds available for roadbuilding in 2003, according to a new report by Davy stockbrokers.
Roadbuilding accounts for 30% of CRH's operating profit, and it is feared that the US economic slowdown will hit the tax take from petrol and truck sales which helps to fund the government road building programme.
However, Davy analyst Joe Burnell does not think the impact will be as severe as is being feared. He says there is scepticism that the deficit suggested by the US Treasury is on such a large scale.
He also says the road building lobby may have the political muscle to lobby for government concessions on the matter.
CRH, he argues, has strong market share in its US regions, and should be able to recover some lost revenue through higher prices.
CRH shares closed 2.68% lower at €18.14 in Dublin this evening - a fall of 50 cent.
