CRH boss upbeat about global economy

AS boss of CRH, Liam O’Mahony, whose company has a turnover of more than €14 billion, is in touch with economic and political events across the globe.

CRH employs 65,000 and operates in nearly 30 countries in Europe, and is also the dominant player in its sectors in the US.

While results were the main focus of attention when CRH met the business press on Tuesday last, O’Mahony, when asked, gave his views of the Irish property market, the outlook for Europe and the potential threats to the US economy, such as the high deficit.

On Ireland and the threat of a property bubble, Mr O’Mahony was unequivocal.

It would “pessimistic” to talk of a property bubble he said.

Economists are sometimes accused of biased reports, but O’Mahony can’t be accused of being in anyone’s pocket - although it is fair to say he has a huge vested interest in seeing both the US and the Irish economies steaming along without interruption.

His views stand in sharp contrast to those who believe the Irish property market is an accident waiting to happen and that it should in fact have happened long before now.

There are those, too, who fear the US is on the edge of implosion which will happen when the dollar is finally undermined by concerns at the mounting US deficit and its refusal to start living within its means.

Some analysts fear that the continuing pressure on oil prices could be the final pressure point that could cause the US to falter seriously.

O’Mahony believes the perceptions from outside the US are unduly negative and as the key market player in the builders materials business he sees no evidence of an impending crisis.

For good measure the group is looking to strong growth across its five US divisions in 2006 and it continues to spend millions expanding its interests in all areas in which it has an involvement in the US.

O’Mahony said he wasn’t blind to the concerns being raised about the deficit and the impending threat to the dollar.

He admitted that was a more difficult situation but said not even the threat of higher oil prices has succeeded in undermining the US despite the scepticism expressed from this side of the world about the US.

Rising interest rates underscore the view that the US is suffering from inflation and not deflation which points to healthy economic activity, a fact economists have highlighted as the Federal Reserve continues to raise rates to dampen demand.

He even took time out to dampen China fever, where conventional wisdom again suggests this is the economy to be investing in.

With one Irish fund taking in a million a week into its China/India fund the CRH boss said he was in no mad rush to buy into China.

On the thorny issue of the house bubble in Ireland, Mr O’Mahony said it was obvious that demand was driving the market. Inevitably it will slow but not in the way the doom merchants suggest, he said.

A slow down or slump has been predicted for several years, but the market refuses to pay any heed

For him the explanation is simple and based on common sense; Ireland is playing catch up with the rest of the world. Growing employment, immigration and a rising population underpin the demand for housing.

Inevitably some slow down in demand will happen, but it does not mean a massive slump in the market is inevitable.

To underscore his optimism about the Irish economy Mr O’Mahony said the need for significant upgrading of roads and the rest of the country’s infrastructure would underpin construction for several years to come.

Finally he believes Europe is showing some sign of pick up but Germany will not show any significant movement before 2007, he reckoned.

As the head of a group that made over €1.2bn in profits last year his views are an interesting antidote to the more pessimistic take on the global economic outlook.

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