VIENNA, July 17 Wienerberger, the
world's biggest brickmaker, is increasing its capacity in
Britain to meet rising demand for housing driven by government
schemes, it said on Thursday.
The Austrian company said it would produce an extra 200
million bricks per year, enough for about 25,000 new homes, by
reactivating mothballed factories, investing in technology
upgrades, adding work shifts and new jobs and importing
materials from Europe.
"Government initiatives including the Help to Buy Scheme
have led to a revival of the housing market and a significant
increase in construction activity," it said in a statement.
The company stuck to its full-year guidance for 300 million
euros ($406 million) in earnings before interest, tax,
depreciation and amortisation (EBITDA), saying higher demand in
Britain was balanced by a weaker Netherlands and France.
Schemes such as Help to Buy, which widens access to mortgage
finance to home-buyers unable to pay large deposits, have
encouraged developers to press ahead with projects - as have low
interest rates and a sharp rise in house prices.
The monthly Markit/CIPS purchasing managers' index for the
British construction sector, a measure of construction activity,
rose to 62.6 in June from 60.0 in May, its highest level since
February and well above the forecast for a fall to 59.5.
Readings above 50 represent year-on-year growth in activity,
and those below 50 point to contraction.
Home-building was the fastest-growing sector, with the
biggest pick-up in activity since January.
Barratt Developments, Britain's biggest
housebuilder by volume, said last week it expected its full-year
profit to more than double to about 390 million pounds ($667
million) thanks to a buoyant housing market.
However there have been some signs that Britain's housing
market is cooling. Mortgage approvals in May fell to their
lowest level in 11 months, in part due to tighter affordability
checks that lenders have been required to apply since April.
Surveyors have also reported slower conditions.
Wienerberger cited an estimate that there would be 165,000
housing starts in Britain this year, an increase of more than
23,000 units from last year. It had no immediate comment on the
size of its investment or how many people it would hire.
($1 = 0.7390 Euros; $1 = 0.5844 British Pounds)
(Reporting by Georgina Prodhan; Editing by Pravin Char)