LONDON, Aug 16 (Reuters) – European construction companies face another tough 18 months, with costs driven higher by soaring commodity prices, and recovery held back by suppliers favouring Asia and the Middle East over Europe, according to EC Harris.

“Contract prices won’t have increased (over the next 1-2 years), because that’s the nature of the competition, but their costs will start to increase disproportionately, and that will create the pressure,” said Mathew Riley, head of cost and commercial management at EC Harris, a London-based consulting firm.

Rising commodity prices, higher manufacturing output costs and wage inflation are all expected to hit building contractors over the next 12-18 months.

At the same time, fierce competition for deals will keep contact prices flat.

“The obvious impact is that it will squeeze operating margins,” said Riley, though big-hitters such as Germany’s Hochtief , Britain’s Balfour Beatty , and France’s Vinci and Bouygues will be better placed to control the impact than smaller domestic players.

“They will be able to manage or balance the impact across their businesses,” he added.

Euroconstruct cautioned in June that it expected construction output in the 19 European countries it monitors to fall by 0.4 percent in 2011 compared with the 0.1 percent drop it had forecast in December.

BIRMINGHAM, England (Reuters) – At the scene where three young British Asian men were killed in Birmingham this week, some of their friends are standing in the road, collecting money for a memorial to the men whose deaths sparked fears of race riots in Britain’s second city.

Haroon Jahan, Shazad Ali and Abdul Musavir, all British Pakistanis, were killed in the early hours of Wednesday during a wave of disorder and looting. The following evening, Tariq Jahan, Haroon’s father, called for calm, as fears of retaliation rose when it emerged that the driver of the vehicle involved in the fatal hit-and-run incident in Winson Green was Afro-Caribbean.

Local leaders from both the Asian and Afro-Caribbean communities in Birmingham have also sought to defuse racial tensions after the city was hit with the same kind of looting, arson and violence which has swept London and other British cities this week.

“If the racial tension level in Winson Green and Birmingham was 2/10 before the riots, and increased to 8/10, he (Tariq Jahan) certainly brought it back down to 3 or 4/10,” said Councillor Waseem Zaffar for Lozells, Birchfield and Handsworth, neighboring areas that have been hit by riots in recent decades.

Two hundred meters down the high street in Winson Green, an area to the west of the city center, Alton Burnett, vice chair of the Afro-Caribbean Millennium community center, is grabbing his dinner, in between interviews with TV broadcasters.

“This is not a racial issue,” he stressed. “We’ll be working with the Asian people … to strengthen the good relationship we had before,” he added, claiming that the media and right-wing groups had made statements to incite racial tension.

The most deprived areas of ethnically-mixed Birmingham have been on high alert over fears of reprisals from the Asian community, a minority of whom are claiming racial elements to the attacks.

LONDON, Aug 8 (Reuters) – British housebuilder Barratt Developments said it is in early talks with investors to sell part of its shared equity mortgage book, a set of loans which might whet the appetites of private equity or banks.

Britain’s largest housebuilder by volume confirmed press speculation on Monday that it is mulling a partial sale of its portfolio of shared equity loans, worth 170 million pounds ($278.5 mln) in total according to a source close to the deal.

Shared equity loan schemes enable a potential home buyer to secure a new home with a very low deposit.

The homebuilder, either by itself or teaming up with the government, acquires an equity stake that is normally around 25 percent of the purchase price, sometimes rising to 50 percent. The remainder is financed by a deposit and mortgage, which must be repaid by the occupying home buyer in tandem with rent payments to the holder of the equity stake.

Analysts said the sale might attract interest from banks and private equity funds — looking to amass other shared equity portfolios — and banks.

“(Such a deal for banks) would act as a partial hedge against a mortgage book any way. So they would be getting a relatively regular income back from it,” said Kevin Cammack at Cenkos Securities.

“Very often these things (shared mortgages) don’t see out their full term. I know for a fact that one or two of the banks have looked at that sort of thing,” he added.

LONDON, Aug 4 (Reuters) – Insurer RSA announced the surprise departure of chief executive Andy Haste, credited with transforming the company’s fortunes during his eight-year tenure, and lined up the highly regarded head of its international unit as a replacement.

Haste, 49, will stay on until the end of the year to ensure a smooth handover to RSA International boss Simon Lee, but the transition could reignite takeover speculation that has stalked Britain’s biggest commercial insurer, one analyst said.

The outgoing CEO, well respected by investors and analysts after overseeing a fourfold rise in RSA’s market value, said he had not yet decided what his next move would be.

“I have no set plans at the moment, I will take some time to think about what to do next,” Haste told reporters on a conference call.

RSA shares were down 2.7 percent at 121.3 pence by 1028 GMT, making them the second biggest faller in the Stoxx 600 European insurance share index , which was up 0.6 percent.

Haste, one of the longest-serving FTSE 100 chief executives, launched an overhaul of RSA on taking over in 2003, selling off underperforming life insurance units and ring-fencing the group from potentially crippling asbestos-related claims in the U.S.

Shore Capital analyst Eamonn Flanagan said his departure could tempt rivals to make a bid for the group, following press reports last month of a potential approach from an overseas insurer.

By Lorraine Turner

LONDON (Reuters Life!) – A growing desire for the glossy, long locks of celebrities is fuelling a multi-million pound (dollar) global trade in human hair, with demand for hair extensions surging in the past year, according to e-commerce website Alibaba.com.

Searches for human hair extensions in Britain jumped 160 percent in the 12 months to the end of June, with salons noting an increase in women seeking to emulate the hair of stars such as former “X Factor” judge Cheryl Cole and Pussycat Dolls singer Nicole Scherzinger.

“There’s been a huge upswing in hair. The celebrity culture has made hair extensions more popular, and everyone wants hair from India,” said Linda Kozlowski, Head of International Business Development and Marketing, at Alibaba.com

“With an estimated 65 million pounds ($105.9 million) being spent on various types of hair extensions each year, it’s no surprise that UK SMEs (small and medium enterprises) in the beauty sector are looking to capitalize on this growing market,” she said.

Britain was the third largest buyer of human hair worldwide behind the United States and China in the period, said Alibaba.com,, the only listed unit of China’s Alibaba Group.

Over half of the searches were for Brazilian hair, and 29 percent for Indian hair, which has been used for decades in the production of wigs, according to one Indian human hair export website.

LONDON, August 3 (Reuters) – British housebuilder Taylor Wimpey reported a rise in first-half margins and profit and predicted a stable housing market, despite economic conditions forecast to be tough for the remainder of the year.

The head of Britain’s second largest builder by market value said only an external shock, such as a bank collapse or major debt default, could destabilise a market that has not fallen in terms of prices since the start of 2009.

“What we’re seeing within the UK housing market is a very balanced market … (It) seems to be pretty resilient, particularly helped by the lack of supply,” Chief Executive Pete Redfern told journalists on Wednesday.

“So as long as a homebuilder is not expecting significant volume or price growth, that balance seems to be quite stable,” he added.

This echoes comments from peers in July, while analysts indicated a chronic lack of housing in the UK would continue to act as a prop to the industry.

Britain’s economy is expected to grow at a sluggish pace this year as consumers scale back spending and uncertainties about the global recovery weigh on sentiment.

Looking forward to the important Autumn selling period, Redfern said the group is encouraged after stronger-than-usual sales in the month of July.

LONDON, August 2 (Reuters) – British manufacturing companies that supply booming oil and gas, and aerospace sectors, are reaping the rewards of a focus on export markets that has allowed them to buck the sluggish growth trend of firms more reliant on the UK.

Pumps and valves maker Weir and Rotork , which makes valve control systems for the oil, gas and water industries, on Tuesday hiked estimates for full-year earnings. And aero engineers Meggitt and Senior both reported forecast beating first-half results this week.

They produced strong performances even though British manufacturing shrank in July for the first time since the country was in recession two years ago.

The Markit/CIPS manufacturing PMI survey showed that domestic demand fell sharply last month, with firms that supply the consumer sector particularly hard hit.

But manufacturers with their eyes on overseas markets experienced a different trend. New export orders rose at their fastest rate in three months, and firms focused on emerging markets, and industries such as the booming mining, oil and gas and aerospace sectors, reported stellar growth.

Weir, which posted a 24 percent jump in first-half pretax profit, predicted full-year results would be better than previously hoped as conditions remained buoyant in the North American upstream market as the high oil price drove growth in unconventional drilling. .

It said it would inject $75 million into its flourishing oil and gas business — with orders soaring 82 percent in the period – to increase manufacturing capacity by approximately 20 percent over the next 18 months, its Chief Executive, Keith Cochrane told journalists.

LONDON, July 28 (Reuters) – British transport group National Express is bullish on margin growth after reporting a 26 percent rise in first-half underlying profit, at the top end of forecasts.

“There is more to come in terms of margin growth…we should see the margins continue to grow in the second half,” Chief Executive Dean Finch told reporters.

“The summer is important to us, but it started well particularly in Spain… so we just see the trend continuing,” he added.

National Express, an operator of coach, bus and rail services, said underlying profit for the six months to end June rose to 95.5 million pounds ($156 million), at the top end of forecasts.

Analysts pointed to improvements in the group’s UK bus and rail businesses, with earnings before interest and tax (EBIT) up 39 percent and 24 percent respectively.

“National Express has replaced the recovery theme with an underlying growth story, although it still needs to repair the potential loss of rail franchises in 2012 and has headwinds in its bus and coach businesses for 2012,” said Paul Hickman at Peel Hunt, upping its target price and full-year numbers.

National Rail’s operating margin improved by 150 basis points to 10.5 percent, recovering from historic lows in 2009. It said last month that first half revenues grew across its bus and rail businesses at home and abroad.

DUBLIN, July 14 (Reuters) – Ireland’s debt burden is manageable but it needs European leaders to quickly agree on a solution to the bloc’s debt crisis if its sky-high borrowing costs are to fall, a senior IMF official said on Thursday.

Ireland received a thumbs up from the IMF, European Commission and European Central Bank on Thursday after a quarterly review of Dublin’s programme to implement its 85 billion euro bailout agreed last year. But Irish bond yields, which hit a record high on Wednesday, remained elevated due to the deepening euro zone crisis and Moody’s downgrade of Ireland’s credit rating to junk status this week.

Ajai Chopra, the IMF’s mission chief to Ireland, heaped criticism on European leaders, saying they needed to provide “consistent, cohesive and co-operative” policies and said the rating agencies may be overestimating the risks associated with the euro zone debt crisis.

“What is critical now is for Europe to dispel the uncertainty that has been created by … what is perceived by markets and many as an insufficient response,” he told a news conference in Dublin.

“What we need and is what is lacking so far is a European solution to a European problem.”

Only three months ago, Chopra was talking about an Irish solution to an Irish problem but in recent weeks the scale of the debt crisis has widened with Italy, Europe’s third-largest economy and one of the world’s biggest debtors, now in its cross hairs.

Ireland’s junk status has helped push its borrowing costs to fresh euro era highs, raising the likelihood that the country will need a second bailout when the current programme runs out in 2013.

DUBLIN (Reuters) – European Union leaders need to come up with a comprehensive plan for tackling the region’s debt crisis if they hold an emergency summit on Friday, the Irish Prime Minister said on Wednesday after Ireland had to swallow its first ever junk credit rating.

Rating agency Moody’s downgraded Ireland’s on Tuesday and said it was likely to follow Greece in needing a second bailout, a stance that government officials said will make it harder for Dublin to return to funding itself through debt markets next year.

Irish officials are increasingly frustrated at the lack of clarity among euro zone policymakers over how to address Greece’s debt problems and the impact this is having on Dublin’s own debt sustainability.

“There is no point in having a meeting that won’t bring about a conclusion in a comprehensive sense to something that is not going to go away unless it is dealt with,” Prime Minister Enda Kenny told parliament.

“Moody’s problem is not with Ireland, Ireland’s problem is with Europe.”

A market attack on Italy which, if it required assistance, would overwhelm the euro zone’s existing rescue funds, looked to have rattled European leaders into action this week but Germany threw plans for a summit into doubt on Wednesday, saying Greece was funded until September so there was no rush.

Portugal, Greece and Ireland are all struggling to generate enough growth to begin the long task of reducing high public debt burdens and end their reliance on emergency funding, but Finance Minister Michael Noonan warned on Wednesday that Dublin faced major challenges in dodging a second bailout.