Tomkins, the engineering firm, said today that car and house sales would continue to slow in the United States but that its loss of business there would be offset by growth in other markets.

The company, which makes car parts and air conditioning systems for new houses, maintained its outlook for this year despite the problems in the US. However, this failed to reassure investors and its stock fell 1.5p to 181p in early trading.

Tomkins estimates that US car production will fall further than previously estimated, to 14.1 million units from 14.4 million. New housing is expected to fall to 900,000 properties against earlier estimates of 1 million.

Tomkins, which has 60 per cent of its business in the US and confirmed today that it was switching its accounting from sterling to dollars, insisted that a cost-cutting strategy and expansion in other markets would offset reduction in income from America this year. The company reported an 11 per cent fall in profit last year due to the US economic slowdown and aims to save $100 million (£50.3 million) a year in costs by 2010.

James Nicol, the chief executive, said: "We continue to take steps to mitigate the continuing US headwinds and to offset the impact of rising commodity prices through global sourcing, lean initiatives and price increases to our customers. Our businesses have continued to grow in emerging markets and we have seen strong demand in the global industrial sector."

Explore Industry Sectors

• Banking & Finance

• Construction & Property

• Consumer Goods

• Engineering

• Health

• Industrials

• Leisure

• Media

• Natural Resources

• Retailing

• Support Services

• Technology

• Telecoms

• Transport

• Utilities

Times Recommends

• BA chief waives bonus after T5 fiasco
• Prospects of cheaper loans hit as Libor soars
• Rice price dives as US and Japan set to unlock grain pact