UPDATE 2-LafargeHolcim upbeat on U.S. market, investors cheer turnaround

* Q3 core earnings rise 10.5 pct, keeps full-year guidance

* Margins improve as prices rise, cost cuts kick in

* Raises cost-savings target for 2016

ZURICH, Nov 4 (Reuters) - LafargeHolcim is upbeat about the prospects for the U.S. construction market as cost savings and price increases let the world’s largest cement maker cushion the impact of weaker sales volumes during its third quarter, it said on Friday.

Despite a 5 percent decline in cement volumes in the United States, the Swiss construction materials giant said it expected a return to growth for the country’s construction industry, regardless of the outcome of next week’s presidential election.

The U.S. market is important for LafargeHolcim, generating around 11 percent of its earnings in 2015, according to estimates by analysts Bernstein.

Chief Executive Eric Olsen said he expected the U.S. market to continue on a solid growth path, attributing a recent downturn to bad weather in some regions and a delay in some projects.

“Q3 is not an indicator of what is to come,” Olsen told Reuters. “When we look at the (U.S.) housing and infrastructure spending to come, we believe the fundamentals are strong and attractive.”

Olsen, an American, declined to say which candidate he thought would be best for the construction industry in next week’s poll.

Rival HeidelbergCement has said it feared victory for Republican candidate Donald Trump would unsettle the economy and reduce investments in infrastructure projects.

LafargeHolcim shares surged after it reported operating earnings before interest depreciation and amortisation of 1.68 billion Swiss francs ($1.72 billion), slightly above market expectations.

The 10.5 percent increase enabled the company to confirm its goal of “at least” a high-single-digit percentage increase in the measure this year, sending the stock 2.9 percent higher.

The result “gives us confidence that management is back in the driving seat”, said Phil Roseberg, an analyst at Bernstein.

The performance came despite a drop in sales amid the divestment of some businesses as well as lower cement volumes.

Created by the 2015 merger of France’s Lafarge and Switzerland’s Holcim, the group has stepped up its cost savings drive after already hitting its 2016 target of 450 million Swiss francs. It expanded the 2016 goal to 550 million francs.

Olsen said LafargeHolcim continued to see opportunities to make savings in areas like logistics. “We are looking at our cost structure from top to bottom,” he said.

Prices for cement rose 0.3 percent in the third quarter, and Olsen saw prospects for further increases this year and next.

China showed further signs of recovery while India would benefit from a more intense monsoon season, with farmers more likely to spend on construction after plentiful rains.

$1 = 0.9741 Swiss francs Reporting by John Revill; Editing by Michael Shields and Jon Boyle