Building Material Shortages Persist, But Don’t Appear to Be Worse - 11/22/2004 - Real Estate Products Services

Building Material Shortages Persist, But Don’t Appear to Be Getting Any Worse

Although building materials remain in short supply, the devastating hurricane season that inflicted massive damage on Florida in late summer and early fall appears not to have made the situation any worse, according to a recent NAHB survey.

A nationwide survey conducted by the association last month found that builders continue to report shortages of cement, gypsum wall board, oriented strand board (OSB), steel framing and insulation materials, although conditions appear to have been stable since July.

Cement continued to top the list of concerns of survey respondents, with 38% citing shortages of the material, down slightly from 41% in a similar survey conducted in July but still a substantial hike from 11% in May.

Cement prices have jumped nearly 10% in the past year, and John Mothersole, a senior member of Global Insight's Industry Practice, reported at last month’s NAHB Construction Forecast Conference that prices are expected to peak in the spring of 2005 as the Sunshine State’s post-hurricane reconstruction efforts ramp up.

Meanwhile the Portland Cement Association notes in its latest forecast that 35 states are now experiencing cement shortages, up from 29 in its previous survey. PCA cites a strong housing sector and a shortage of ships to transport imported cement as the chief factors why cement remains in short supply.

The U.S. imports more than 20% of its cement to meet domestic needs and Florida relies on imports for about 40% of the cement it uses annually.

For months, NAHB has been calling on the Commerce Department to roll back punitive tariffs on Mexican cement in order to help resolve the scarcity of cement, which is driving up prices and affecting construction projects around the country.

“It takes about 45 days for cement shipments to arrive at U.S. ports from Asia and Europe, compared to an average delivery time of only four days from Mexico. With global shipping capacity already severely strained, Washington should move swiftly to eliminate the costly anti-dumping duties on Mexican cement imports that have forced American builders to look overseas to meet their needs,” said NAHB President Bobby Rayburn.

Twenty-six percent of those surveyed reported experiencing a shortage of gypsum wall board in October, nearly identical to the 25% who cited a shortage of this material in July.

One-quarter of those polled said there is a scarcity of rebar (steel reinforcing bars), up modestly from the 18% who reported rebar shortages in the July survey.

There was little change in shortages of insulation materials, which were reported by 21% of those responding in the latest survey, compared to 20% in July.

Just over one-third (34%) of those surveyed said they are experiencing shortages of oriented strand board, compared to 30% in the July survey. OSB prices are very volatile but have been down sharply over the past several.

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