Hurricane recovery pressures construction materials prices

Northern Nevada builders are beginning to feel cost pressures as the demand rises for building materials to rebuild hurricanestricken parts of the Gulf Coast.

"There is already a shortage of roofing materials and engineered sheet lumber," says Tony Abreu, vice president for development with Reno's SilverStar Communities."We were told by our framing contractor last week that plywood and OSB (oriented strand board) have already gone up 22 percent."

Concrete also may be in short supply for a while, says Joe Serpa, vice president for general engineering with Sparks-based Q&D Construction.

But any shortages, he says, are likely to be resolved fairly quickly as the United States and Mexico resolve a dispute over American beliefs that Mexican companies have dumped cement into the U.S.

market at anti-competitive prices.

Steel prices may be pressured by demand from the Gulf Coast, Serpa said, but slowing demand from China will allow supply to catch up with demand.

"The free market system will work itself out," Serpa says."There is no real need for short-term solutions, just long-term planning."

Like every other industry, construction firms are pinched by higher fuel costs, both for their own operations as well as the freight prices they pay for delivery of materials, says Pat Conners, president of Tetrus Buildings Materials of Reno.

The effects are doubled on products such as insulation and plastic pipe that require petroleum products in the manufacturing process.

Northern Nevada homebuilders, already facing some price resistance from potential buyers,may be reluctant to pass along on the higher costs for materials,Abreu says.

Instead, they may tighten margins.