BUILDING BOOM AFFECTS SUPPLIES; SHORTAGES DUE TO HURRICANE BUILDING EFFORT

Rebuilding after Hurricane Andrew has created an instant construction industry boom in Florida and Louisiana that is creating some far-reaching but hopefully short-term effects nationally.

Rebuilding in the hurricane areas will take a lot of plywood, sheeting materials, lumber and shingles, area building supply spokesmen said.

"This could result in shortages of certain building supplies and increases in costs here," said Jim Tarrence," manager of Wolohan Lumber Co., 120 N. Kingshighway.

Agreeing were Mark Beaudean, president of Southeast Missouri Builders Supply, 411 Jefferson; Ray Reinagel, an owner of Kelso supply; and Michael Annis, Contractor Supply and Home Center, Highway 74.

"Any time you have a hurricane you have the same problem," said Annis. "Shortages start with plywood and dry wall and work their way through lumber and roofing material."

"We're looking at 60 to 90 days of scarce materials," said Beaudean. "Fortunately, many of us in the supply business have a pretty good supply of materials on hand."

"You can tell the difference," said Reinagel. "They're telling us to expect a three- to four-week wait for roof shingles."

The building supply trade is also noticing increases of 25 to 30 percent in prices of some materials.

Repairing and rebuilding the thousands of homes destroyed or damaged by Hurricane Andrew has created the temporary construction boom.

Builders are converging on south Florida to repair the biggest property loss in U.S. history, with insurance payouts projected at more than $7 billion.

The construction industry in Florida was ailing before the storm, according to reports from that area. New housing starts in Dade County were down 60 percent last year to about 6,500 from 1988. An estimated 4,000 to 5,000 construction workers were unemployed before the storm.

The shortage of plywood and other sheeting materials started before the hurricane hit, said one supply spokesman here. "People in the hurricane path purchased anything they could find to board up their property in preparations for the hurricane," said Tarrence. "Now they're buying it to rebuild."

Tarrence said he didn't expect the shortage to last a long time.

"I personally think that things will return to normal within four to six months," he said. "The sheeting items are in demand now. Lumber, sheet-rock and roofing shingles will follow. As these items become scarce, the prices will increase."

"Supplies are tight, and prices are up dramatically," said Beaudean. "Fortunately we did a lot of buying earlier and our plywood and sheeting material prices are running about half of the normal increases we're experiencing."

Beaudean said his company has plenty of building materials on hand.

Annis, who pointed out he has been through this situation before, said that shortages should start slowing within 90 days, and within five to six months things could return to normal.

"This makes it tough for builders to bid a job," said Annis. "Nobody knows at this point what something is going to cost 30 to 60 days from now."

Meanwhile, the hurricane should not have any significant impact on the availability of natural gas or other fuels during the upcoming winter season, said Calvin A. Kent, administrator of the Department of Energy's Energy Information Administration (EIA).

In a statement issued by EIA, Kent called reports on possible natural gas problems "unjustifiably alarmist," saying there will be short-run effects and dislocations but "supplies for the winter should not be affected."

"Natural gas production capacity in the Gulf of Mexico has been impacted only in the short run" said Kent. "Repairs are already under way and only a small number of platforms sustained major damage. Gulf offshore oil and gas-well operators have advised us that most producing platforms were undamaged by Hurricane Andrew."

However, a limited number of the approximate 4,000 platforms showed some damage, ranging from minor to major, and most of those platforms have returned to production.

EIA figures show that the Gulf produces some 15 billion cubic feet of the 50-bcf-per-day U.S. production.

"Even in the short-run there is additional onshore capacity, which can be brought on line to help alleviate temporary problems," said Kent.

Spot prices throughout the country increased as a result of expected reductions, said the EIA spokesman. Although production lost from the offshore area can be replaced by gas from onshore wells, the price of the replacement gas will be higher than gas from the Gulf.