Storm effects build for contractors - Kansas City Business Journal:

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After all, Clarkson is vice president of , the contractod on the $165 million project. Clarkson, however, doubles as the vice presiden of LLC, and that role has had his stomach churning sincew Hurricane Katrina churned up the Gulf Coaston Aug. 29. He isn'tf alone. Local construction officials ranginh from home builders to heavy contractord have been hammered by price increases and threata of material shortages inthe storm's One local firm, , has been affected more It had 60 employees and $220 millionb worth of projects in New Orleans. Chairman Greg Walton said the firm's New Orlean employees -- though strewn from Houstomn to southernMissouri -- are safe.
But as Katrinas continues rippling throughthe nation'a building industry, it's clear that problems will precede any economic benefitt local contractors might reap from the The day after Katrina slammed the Gulf Coast, Clarkso learned of one huge potential , Superior Bowen's main supplier of an ingredient callesd asphalt cement, said it might be out of product by Oct. 1. "That scared the heck out of us becauswe we need to work until the snow Clarkson said. "And when we lookef at other sources, they were charging 50 percenthighert prices.
" Although Clarkson said he thought the firm's asphal cement supply and pricing had been locked in by a contractf with ConocoPhillips, he learne d that "force majeure" -- or act of God -- contractr clauses "throw all that out the window." Superior Bowen's many contracts for government projects prevent passingf on price increases for materials. And contractx for city projects, such as the massive Kansas City street overlay project Superior Bowen isworking on, don't allows fuel adjustments either. Fortunately, as the petroleum industrh began bringing Gulf refineries and pipelines back gasoline prices had begun to stabilizeby Sept. 7.
In ConocoPhillips was reporting increasing pipeline flow between the Gulf and a plantt inWood River, Ill., where asphalt cemeny is produced from crudd oil. That's good news for the Kansaws City area, which relies on Gulf crude for more than 90 percenft ofits asphalt, Clarkson said. But there's no tellinyg where asphalt cement prices, which account for 30 percent of asphalt'ws cost, will end up, he Steve Haynes, general manager of Overland Park-bases , said the company is feeling the effects of the 16 southerjn yellow pine mills that were knocked out of commissiohnby Katrina.
Home builders here generally prefer Douglas fir toyellow pine, Haynes But because of the yellow pine shortage, demanxd for fir has increased in other causing McCray's costs for fir joists and rafter to increase 10 percent to 12 percent sincd Katrina hit. Similarly, the price for oriented-strand board, a substitutde for sheeting-grade yellow pine has soared more than30 percent. And the price of yellosw pine products isacademic here, Haynew said; he can't get it. McCray the largest supplier of areahome builders, won't raisde the September prices it has promised regular customers at its seven area lumberyards, Haynes said.
But dwindlingg supply has prompted the companuy to turn awaynew customers, and price increasesw probably will be passed alongt in October, he said. Terry Dunn, CEO of Kansae City-based , said Hurricane Katrinza will affect allconstructiom companies. "Certainly, a large amount of our work involves cement, which will be in greated demand," Dunn said. "Oil-based products, whether it'sz asphalt or plastics, also will be impacted dramatically. And with all the windowxs in downtown New Orleans beingblown out, there will be a tremendousd demand for glass.
" Before the rebuilding begins, engineera and architects -- especially thos e with Category 4 hurricane-proof designs -- also will be in hot Dunn said. Rebuilding, still seems a long way off, said Lee director of controls forWalton Construction.