The world's biggest brickmaker has blamed a sharp downturn in profits on the collapse of the construction markets in the UK, the US and Germany.

Full-year pre-tax profits at the Austria-based Wienerberger have fallen by 31 per cent to €118 million (£91 million), as construction sites in the company's three biggest markets have come to a standstill.

Wienerberger has said that it will shut or mothball 25 plants this year and next year, with smaller and older production facilities likely to be closed first. Plants in Surrey and Devon have been mothballed, with the loss of about 80 jobs, in the face of a weak British housing market.

Further British brick and tile manufacturing plants could also be closed in the coming months, if there is any further deterioration in the housing market.

Restructuring in Europe and the US is expected to cut £30 million from costs in 2009.

The brickmaker, which bought British company Baggeridge Bricks in 2007, has given warning that earnings will fall by 15 per cent this year and indicated that it may cut its dividend to cope with the contraction in workload, which began to make an impact in the second quarter of 2008.

“Wienerberger expects the current climate of rising interest rates, higher inflation and credit shortages to trigger further weakness on European markets during the remainder of this year,” the company said.

The group reported a 17 per cent drop in second-quarter earnings before interest, tax, depreciation and amortisation.

Revenues fell 4 per cent in the period, driven down by a 27 per cent decline in the United States.

However, continued growth in Poland, Romania, Bulgaria and Russia as well as new residential construction in the Czech Republic and Slovakia will help offset the rapid decline in Western Europe and the US. Wienerberger said it expected its Eastern European business to match last year’s earnings in the full year.

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