Construction Material Prices to Rise in Wake of Katrina

Thu September 15, 2005 - National Edition
Lisa Coston

In the wake of Katrina, with demand high and supply low, Ken Simonson, chief economist at the Associated General Contractors of America (AGC), predicts that the prices for cement, steel, copper, gypsum and petroleum-based products will keep rising for the rest of 2005 and into 2006.

He said contractors need petroleum fuel to run trucks and equipment. Energy costs are, then, built into the price of mining, milling, making, molding and transporting metals, concrete and most other construction materials.

“Cement was already in short supply in 32 states and the District of Columbia last month,” Simonson stated. “The disruption to ocean, barge and rail transport from Katrina, and the loss of power to cement plants in the storm’s path, will cut further into cement supplies. At the same time, the urgent need to stabilize and rebuild roads, other infrastructure and buildings will increase demand for cement and other materials.”

To help keep costs down and supplies up, Simonson, on behalf of the AGC, is urging the Commerce Department and the Southern Tier Cement Committee to reach immediate agreement on a way to allow Mexican cement into the Gulf states without the punitive 55 percent duty now in place.

With new roads and thousands of homes and commercial businesses needing to rebuild from scratch, “the need for that cement is truly critical,” said Simonson. CEG