Australian James Hardie Industries, the largest seller of home siding in the US, today posted a full-year loss as the slump in US housing market deepens. Sydney-based Hardie said its net loss was $US71.6 million ($74.3 million) for the year ended March 31, compared with a net profit of $US151.7 million in fiscal 2007. This year, the company expects further weakness in the United States, where it makes about four-fifths of its sales.
Chief executive Louis Gries said on a conference call that the US slump has deepened. Builders have curbed new home construction because of the collapse of sub-prime mortgages, tighter credit conditions, a higher inventory of new homes for sale and weaker economic conditions. "In the US, the housing market continued to deteriorate," he said, adding that a traditional seasonal pick-up in the fourth fiscal quarter didn’t occur. We normally see a build in March orders but we didn’t see any build in March.
US new housing starts declined 37 per cent last year and by 55 per cent from their peak in 2006, he said, adding that starts were down by 26 per cent in the December quarter, from a year earlier, and by 30 per cent in the March quarter. Indicators suggest further weakness in the US is expected, with Hardie forecasting 800,000 new housing starts, compared with a February prediction of 1 million.
"The market is going to continue to come off," Mr Gries said. "There are very few signs of optimism. The builders are obviously very concerned, as is everyone else in the industry. We don’t know how low it will go." The company closed a Pennsylvania fibre-cement plant in October. It will also shut a Florida pipe plant. The company closed a Pennsylvania fibre-cement plant in October. It will also shut a Florida pipe plant. Hardie also anticipates little change in the Australian residential construction market, a slightly weaker result in New Zealand and growth in the Philippines, he said.