... Woes Fitch expects modest earnings growth for cement producers in 2016, given unchanged capacity utilisation and a limited increase in pricing power from consolidation. Global capacity utilisation is set to remain flat, despite increasing consumption, as we expect new capacity over the next two years will outstrip demand growth in emerging markets. However, European building materials companies will benefit from their strong footprint in developed markets, where any volume growth will directly translate into higher margins, following years of under-investment and cost cuts during the recession. In particular, strong US markets will benefit companies such as CRH plc (BBB/Negative), whose organic growth has been leapfrogging that of peers. Fitch does not expect a material improvement in market concentration from the current M&A wave in the industry that is shaping the face of the sector for many years to come. Global market share remains low,...
