Davy Research |
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Davy on Construction
Guide to the latest forecasts, price performances and valuations in the European building materials sector
18 June 2012
Tim Cahill |
Barry Dixon |
Robert Gardiner |
Flor O'Donoghue |
Killian Murphy |
European construction sector gains for a second week
The European construction sector closed up 0.7% last week, thereby extending the 3.3% gain of the previous week. However, it still lagged the wider market which advanced by just over 1%.
SIG was the biggest gainer, up nearly 11% after it jumped almost 15% on Friday.
Lafarge's advance of over 7% last week also stood out. This followed news of its plans to reduce net debt to under €10bn and to generate at least an additional €1.75bn in EBITDA while improving returns.
Euroconstruct now expects a 2.1% decline in European construction volumes this year
Euroconstruct is now forecasting that European construction volumes will decline by 2.1% this year with only a very modest 0.4% recovery in 2013. Euroconstruct had previously forecast a slight (-0.3%) contraction in 2012 with a 1.8% rebound in 2013.
Construction volumes are predicted to fall this year in 12 of the 19 Euroconstruct member countries. Even still, we believe the balance of risk to these forecasts is on the downside.
The week ahead: US macro indictors to the fore
Another quiet week is likely for corporate newsflow. Attention will therefore centre on US housing data with updates relating to the NAHB index, housing starts and permits and existing homes sales due.
Please refer to important disclosures at the end of this report.