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Investing.com -- European construction companies with exposure to North America fell on Wednesday after James Hardie (NYSE:JHX) Industries Plc issued a downbeat outlook on the US housing market, raising fresh concerns about demand in one of their biggest end markets.
Hochtief (ETR:HOTG) and Assa Abloy (OTC:ASAZY) both declined 0.9%, Skanska lost 0.4%, Sulzer slid 1.5% and Rexel (EPA:RXL) retreated 0.7% at 05:15 ET (09:15 GMT).
Other related companies with major US operations also lagged, including equipment rental firm Ashtead Group (LON:AHT), down 0.7%, and pest control specialist Rentokil, off 0.6%.
The moves came after James Hardie, the world’s largest fiber cement producer, saw its shares plunge 28% in Sydney, the steepest one-day drop since 1973, following weak quarterly results and a warning that demand for both new construction and repair projects in North America remains challenging.
Adjusted net operating profit sank 29% from a year earlier to $126.9 million in the June quarter, while North American sales fell 12%.
“Uncertainty is a common thread throughout conversations with customer and contractor partners,” chief executive Aaron Erter said in a statement, noting that homeowners are deferring big-ticket remodeling projects and affordability remains the key obstacle for single-family housing starts.
The warning underscores persistent weakness in the US real estate market, which just recorded its slowest spring selling season in more than a dozen years.
On Tuesday, Toll Brothers (NYSE:TOL) Inc. also reported orders that missed analysts’ estimates, adding to evidence that rising costs and tight credit conditions are holding back buyers.
North America accounts for about 70% of James Hardie’s revenue, with key markets such as Texas, Florida and Georgia struggling under elevated inventories and affordability barriers.