'Low growth' for building materials
MOODY'S says the European building materials sector, which includes Ireland's biggest company CRH, can expect flat to low growth over the next 12-18 months.
It forecasts between zero and 4pc earnings growth over the period, with large discrepancies between European-focused producers and more geographically diversified companies. It says the outlook for the sector is stable. The ratings agency says demand will be mixed across Europe, but good volume growth is expected in Asia-Pacific and Latin America.
CRH recently announced that its profit for the first half of 2013 would be lower than expected, blaming bad weather in the US and "prolonged winter conditions" in Europe, as well as poor European demand.
The company said "significant trading pressures continue" in Europe, where it is focused on implementing further measures to reduce its cost base.
Moody's predicts mid single-digit increases in cement volumes in North America, which will compensate for a mid single-digit decline in volumes in Western Europe. Energy costs are expected to pose less of a challenge than they did in 2012.
Cement producers with more exposure to emerging markets will see higher cost inflation than their EU-focused peers.