Spending spree of €2.2bn in pipeline

CRH COULD spend another €2.2 billion on acquisitions this year, or more, if the right opportunities came up.

It will only buy where it sees good value and in the past has made it clear it has enough cash and credit to spend more than €4bn enlarging its business operations that constitute the second largest builders provider on the globe.

It employs 90,000 people at 3,600 locations in 30 countries.

Up to 40,000 of those are in the US, where the slowdown has been causing the group to cut numbers as it rationalises to cope with slower demand in housing and other construction areas.

It started job shedding last year and by the end of 2008 as many as 3,000 jobs may be gone from the US operations.

Chief executive Liam O’Mahony said he expects the US to pull out of recession after a few quarters of falling growth.

In his view the recession “will not be a long one”.

But the “credit crunch” is a huge factor and will dictate how quickly the world’s largest economy gets back on track.

Up to two million houses are required to be built annually and should see the building sector return to more normal trading once the bad debts and the “fear factor preventing banks from doing business with each is out of the way”, he said.

He expects the slowdown could be over by the end of this year.

But it could be 12 to 18 months before being officially confirmed, he said.

CRH is finding the US to be “quite flat” at present with no obvious end to the downturn, he said.

But it has a growing population and a flexible labour market and will recover quicker than many expect, said Mr O’Mahony.

Housing in Ireland is “going though a correction”, he said.

Economic growth prospects remain good but “we could not continue growing at the phenomenal level of 7 to 8% a year”.

Expectations have to be adjusted, he said. “We were building 20 houses per 1,000 of the population and there’s no country in the world building houses at that level.”

What is happening is the market “is going through a correction and it will clearly have a negative effect on GDP will fall to about 2% this year”, he said.

“But that’s a once-off correction and the economy will move back to trend growth of 3 to 4% in the years ahead,” he added.

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