Chief executive of CRH Albert Manifold was upbeat about the group's results for the first six months of this year, with the clear message that the focus on cost-cutting during the sector's prolonged trough was about to reap rewards as the construction materials sector faced into a period of growth.
Talk of margins, acquisitions and a multibillion divestment programme littered the 31-page document that outlined the half-year results, but vying for top position in terms of a recurring topic, was the weather.
This wasn’t because the construction materials multinational is an Irish company but is rather a factor of the importance of weather to the sector CRH sells into. Given that climate change is now an accepted fact and that more frequent extreme weather is something we are all going to have to live with, weather is undoubtedly going to become an even greater factor in the group’s business.
The weather word occurs 36 times in the interim results document and twice in the paragraph-long quote from Manifold on the first page that was the group’s effort to summarise how the first half of 2014 unfolded.
The year “got off to an encouraging start with favourable weather in Europe”, he said. “Assuming normal weather patterns” and other factors, the group expects earnings in the second half of this year to be ahead of those of the same period in 2013.
The most important market for the group is north America and the normal pattern is that, after St Patrick’s Day, sales above the Mason Dixon line start to take off. This year the record-breaking cold air that hit much of North America hampered construction activity through to the beginning of May.
Sales in the Americas were affected “by very severe weather conditions for the second successive year in many of our markets”, noted the report.
Not only that, but the extra demand for energy due to the severe cold pushed up energy prices, which in turn added to CRH’s costs.
