Shares in European building material firms fell today, with CRH down nearly 4%, after a ratings company said it expects the US slowdown to affect profit margins.
Fitch Ratings said it expects this years performance of European Building Materials (EBM) to be characterised by stable or moderately improving profitability margins.
However, it warned that the continued weakness in the US residential construction landscape has negatively affected sales growth and profit margins in the US divisions of all EBM companies rated by Fitch.
These companies include CRH (stable outlook), HeidelbergCement AG, Holcim, Lafarge SA and Compagnie de Saint-Gobain.
Fitch said that major cement players such as Holcim, Lafarge and HC, while reporting global volume growth in sales, faced revenue declines in the US that varied from 5.5% to 13.8%.
French group's Lafarge's gypsum division also experienced a 32% drop in turnover in the US due to price and volume declines, as this division is largely exposed to residential construction, Fitch said.
The company's shares were down 1.4% this evening. Fellow french company Compagnie de Saint-Gobain was also down 1.5%.
CRH was down €1.20 at €29.00, and Readymix was down seven cent at €1.83 in Dublin and in London Wolseley was down 3.6% at 942 pence.
Fitch said that turnover growth in US divisions was also negatively affected by foreign exchange impact.
