Kingspan, the building materials firm, said today in an Interim Management Statement, that trading in the first four months of 2009 has been predictably tough, characterised by widespread reluctance from customers to commit to new build construction projects. Overall, sales have plunged by34% (-27% on constant currency) to €350m compared to the same period last year and by 39% (-33% on constant currency) excluding acquisitions.

Kingspan said the expected contraction in new building activity was partly offset by improving thermal standards, an encouraging trend in the residential refurbishment market, and timely action to reduce costs and working capital at all levels throughout the organisation.

The group said despite the current weakness, the longer term potential in the US remains very compelling, particularly as the building energy standards are set to rise substantially into the future.

While the economic environment is widely forecasted to continue stabilising, Kingspan said it is likely to experience further contraction in the near term, although at a reduced rate to that experienced to date. It said it anticipates some improvement in operating performance during the summer months. Medium term, Kingspan said it"remains exceptionally well positioned, both in product and geography, to deal with the opportunities and challenges which it is likely to encounter."