AGC Economist Weighs in on Katrina’s Impact

Ken Simonson, chief economist for the Associated General Contractors of America (AGC) says the devastation wrought by Hurricane Katrina will have varied impacts on construction markets for the remainder of 2005 and into 2006.

The full impact of the storm that ravaged New Orleans and the Gulf Coast is yet to be seen, according to Simonson, who commented on the U.S. Census Bureau’s most recent report on construction spending, released on Sept. 1.

According to the Census Bureau’s report, construction spending totaled $1.1 trillion, unchanged from the June total. More information on that report is available here.

Simonson says that cement was already in short supply in 32 states and the District of Columbia before Katrina. “The disruption to the ocean, barge and rail transport from Katrina, and the loss of power to cement plants in the storm’s path, will further cut into cement supplies,” he says. “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 ease the cement shortage, Simonson says the AGC has been urging the U.S. Commerce Department and the Southern Tier Cement Committee to reach an immediate agreement on a way to allow Mexican cement into the Gulf states without the punitive 55 percent duty now in place. “Now the need for cement is truly critical,” Simonson says.

According to Simonson, AGC members have been working with the Army Corps of Engineers and other federal and state agencies to provide equipment and expertise to the affected region.