LV likely to see shortage of materials as Gulf rebuilds

Jennifer Shubinski

Thursday, Sept. 1, 2005 | 11:07 a.m.

The massive rebuilding effort that is sure to take place along the Gulf Coast in the aftermath of Hurricane Katrina may impact the price and availability of construction materials in Southern Nevada but most likely will not significantly draw from Las Vegas' workforce, industry experts said.

While it is too early to tell exactly how much a concentrated rebuilding effort will cost in Louisiana, Mississippi and Alabama, it's estimated that it will cost insurers $25 billion.

By comparison, Hurricane Andrew, which struck southern Florida in August 1992, caused $15.5 billion in insured property damage, which at the time was the costliest natural disaster in U.S. history, according to trade group Insurance Information Institute.

"Probably the more likely impact is on materials, that is to say we have seen construction material prices increase faster than the consumer price index," said Keith Schwer, director of the UNLV Center for Business and Economic Research. "There have been shortages that drove prices up in critical areas."

Costs for framing lumber, steel and cement have increased over the past year in response to supply constraints and worldwide demand.

Ken Simonson, chief economist for the Virginia-based Associated General Contractors of America, said in the past manufacturers have successfully responded to increased demand of construction materials.

"Although the damage in this case is unprecedented in scope," he said.

An event, such as a hurricane, that would further stretch those resources is bound to have an impact on the availability and cost of certain construction materials, Schwer said.

"You've got massive destruction of house and businesses that will all have to be rebuilt and that will all require materials," he said.

Pulte Homes spokeswoman Allison Copening said what is on the minds of Las Vegas employees is how they -- and the company -- can help those who've lost everything.

"We are waiting from direction from corporate," she said.

Pulte Homes, one of the Las Vegas Valley's largest homebuilders, does not currently build homes in Louisiana, Alabama or Mississippi.

As far as the future impact to building supplies, Copening said the company has not yet heard from its trade contractors.

"It's still so new we've not heard any word from our trade contractors in terms of the availability or the delivery of products," she said.

When rebuilding efforts do begin in the Gulf Coast states, there will be a large demand for construction workers and skilled tradesman.

Local and national economists doubted that the need for such workers will affect Las Vegas, which has one of the most robust construction industries in the nation.

Simonson said construction workers will most likely come from the affected region and nearby states.

"It is far enough away so that the impact will be less than in Texas and in southeastern states," he said.

Terry Stratton, chief operating officer of Martin-Harris Construction, said he doubts that large numbers of Las Vegas construction workers will be attracted to the Gulf Coast rebuilding efforts.

"There is so much work here, most are working in our industry," he said.

Having said that, Stratton said the company would be interested in helping in any way that it could in rebuilding efforts.

"I think that we would be happy to help in any way we can, to help organize an approach" to rebuilding, he said. "It needs to be done."