Table of Contents
Executive summary..................................................................3
Residential construction...............................................................................................3
Non-residential construction........................................................................................3
Engineering and infrastructure construction ................................................................3
Stock implications........................................................................................................4
Section 1: Residential construction........................................5
Overview of J.P. Morgan’s view .................................................................................5
Building Commencements – the state of play..............................................................6
Impact of fiscal stimulus on the sector.........................................................................7
Key leading indicators .................................................................................................8
Other data to consider ................................................................................................17
Other factors to consider............................................................................................18
Section 2: Non-residential construction...............................21
Overview of J.P. Morgan’s view ...............................................................................21
Construction work done – The state of play ..............................................................21
Impact of fiscal stimulus on the sector.......................................................................22
Key leading indicators ...............................................................................................22
Other data to consider ................................................................................................26
Other factors to consider............................................................................................27
Section 3: Engineering & infrastructure construction ........29
Overview of J.P. Morgan’s view ...............................................................................29
Construction work done – The state of play ..............................................................30
Impact of fiscal stimulus on the sector.......................................................................30
Key leading indicators ...............................................................................................31
Section 4: Pricing ...................................................................35
Materials Cost Inflation .............................................................................................35
Section 5: Our earnings revisions ........................................38
Adelaide Brighton Limited ........................................................................................38
Boral Limited.............................................................................................................38
CSR Limited ..............................................................................................................39
James Hardie Industries N.V. ....................................................................................39
Section 6: Our recommendations .........................................40
Boral Limited – Underweight, $4.17 price target ......................................................40
CSR Limited – Overweight, $2.09 price target..........................................................42
Adelaide Brighton Limited – Neutral, $2.72 price target...........................................45
James Hardie Industries N.V. – Underweight, $4.56 price target..............................45
Financial Summary: Adelaide Brighton Limited..................47
Financial Summary: Boral Limited........................................48
Financial Summary: CSR Limited .........................................49
Financial Summary: James Hardie Industries N.V. .............50