"It's moderating, but it's moderating at a very slow rate," he said. "The housing market is nowhere near receding to anywhere near the norm."

In the United States, where Boral generates about 25 per cent of its earnings from Texas, there will be a short-term blip from the severe flooding around Houston following Hurricane Harvey.

Short-term impact

"We have a few plants that are shuttered in the impacted area," Mr Kane said. He said it was too early to say what the short-term impact would be on profits.

But he was confident the Texan economy would recover fast after the floodwaters subsided. "It will drain quickly as soon as the rain stops".

Texas has been a profit powerhouse state for Boral for the past 20 years, and Mr Kane said demand would shoot up as the rebuilding occurred.

The other big global hotspot, North Korea, is also something of a dilemma for Boral, which derives 23 per cent of revenues in its USG Boral sheet rock business from the South Korean market.

But Mr Kane said there had been 30 years of tensions and uncertainties, and those further from the epicentre tended to be more spooked than the locals in South Korea.


"They tend to take it in stride," he said.

Boral expects 15 per cent growth in 2017-18 in the value of work the company is doing on roads, highways and bridges in Australia as governments spend on big-ticket projects.

Boral's local arm is part way through projects such as NorthConnex and Sydney Metro in NSW, and the Northern Connector freeway in South Australia.

It is also tendering for bigger projects such as the Melbourne Metro and Western Distributor in Victoria, and also has its eye on the second Sydney airport at Badgerys Creek.

Mr Kane said new housing starts were expected to fall about 12 per cent to 190,000 in 2017-18 and the renovations market was forecast to remain steady after a 3 per cent rise in 2016-17. Housing starts hit a peak of 234,000 in 2015-16. The long-term "norm" is 150,000.

Dividend up

On Wednesday, Boral raised its final dividend marginally to 12¢ per share from 11.5¢ per share a year ago, after announcing a 16 per cent increase in net profit after tax to $296.9 million.

Total revenue was up 1.8 per cent to $4.39 billion. Profit before tax and one-offs was up 22.3 per cent to $409.2 million. The 50 per cent franked final dividend will be paid on October 3.


Citi analyst Simon Thackray said the EBITDA margins in Australia of 16 per cent "set a new high water mark". Boral shares were 2.9 per cent lower at $6.63 at the close on Wednesday. They were fetching $6.32 a year ago.

Mr Kane is now spending about half his time in the United States as Boral integrates the $US2.6 billion Headwaters fly ash and building products operations.

Boral made a big bet on the future strength of the American economy when it announced the Headwaters acquisition in November 2016.

Boral North America, the newly-established division, which combined the Headwaters business with Boral's existing US operations, increased its earnings before interest and tax by 50 per cent to $66 million.

It included a US$21 million ($28 million) contribution from eight weeks of full ownership of the Headwaters business, which Mr Kane said was in line with the guidance provided when the purchase was announced.

Mr Kane, who has strongly criticised policymakers in the past, said he had lowered his expectations of what could be achieved in Washington and Canberra by politicians, and that way he wouldn't be disappointed.

"At the end of the day I tend to ignore the noise," he said. Instead, his focus was more on the real-world economy.