DKM's Annette Hughes has forecast that construction volumes will fall 6 per cent next year, after growth of just 2 per cent in the current year and 11 per cent average annual growth over the past seven years.
If those forecasts are correct, it would seem an odd time for CRH to go hiking cement prices by 6 per cent, even if this is the first increase in its cement price for six years. Lower output means reduced demand for building materials and lower demand for commodities usually means that prices get squeezed.
CRH's Irish Cement subsidiary supplies 80 per cent of the Irish market, with the balance coming from Sean Quinn's plant in Derrylin and other imports. Quinn's Derrylin plant has a very low cost base and the move by CRH opens up the possibility of some aggressive moves to increase market share by Quinn.
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