Forecasting that new housing activity will decline by 10 per cent this year and next, and non-residential building will fall by 3 per cent in 2002, Merrion Stockbrokers has cut earnings forecasts for a number of Irish construction stocks.

Heiton, with the highest proportion of trading profits earned in the Irish market (90 per cent), has had its 2002 (year to end-April) EPS forecast cut by 2 per cent to 39.8 cents, and by 6.8 per cent for 2003 to 42.1 cents; a reduce recommendation has been put on the shares.

Readymix has had its 2002 forecast cut by 5.9 per cent to 22.5 cents and by 6.6 per cent for 2003 to 24 cents.

Grafton's forecast has been cut by 3 per cent for 2002 to 35.7 cents and by 3.2 per cent to 39.1 cents for 2003, but its buy recommendation has been maintained because of its "attractive" P/E of 8.7 times revised 2002 earnings per share.

Kingspan forecasts have been cut by 2.2 per cent for 2002 to 40.6 cents and by 2.3 per cent to 47 cent for 2003; while for CRH, which has a good geographic spread, forecasts have been cut by just 0.7 per cent to 133.7 cents for 2002 and by 0.8 per cent to 143.5 cents for 2003.

Forecasts for Qualceram are unchanged at 46 cents for 2002 and 50.8 cents for 2003. CRH, Kingspan and Qualceram all retain buy recommendations. Merrion does not act as broker to any of these companies.