Utah builders see some supply improvements

Utah builders see some supply improvements
Published: 30 January 2006

Utah state construction experts say while the supply of cement and other building materials remains tight, the situation has recently improved. m"The overall word I’m hearing is that we’re through the worst of it," said Dave Hogan, vice president of construction for Ogden-based Wadman Corp. "But we’ll have to see what happens in the spring and summer, when things get hot and heavy."

Wadman had several projects throughout the west that were delayed last year because of the cement shortage, including a Wal-Mart Supercenter in South Jordan that opened last week.

Utah builders had a record year in 2005 despite the slowdowns caused by difficulty in finding adequate cement supplies. 2006 could be another record year for new construction, especially if the cement starts flowing freely again.

"I think demand this year will be higher than last year," said John Parson, chief executive of Ogden-based Staker & Parson Cos., one of the west’s largest cement contractors. "The residential market continues to grow, and the state received additional money for highways this year."

Staker & Parson, which sells about 2Mt of cement annually, has had to ration some of its deliveries in the past year. The company is trying to expand its network of cement suppliers in other countries, Parson said. "I’m confident that we’ll be able to bring more foreign-born cement onto the market," he said.

The Portland Cement Association projects that US cement consumption in 2006 will exceed 130Mt, a 3.7 per cent increase over 2005. "Public works projects such as highway construction and government buildings will increase in 2006, contributing greatly to the increase in cement consumption," PCA chief economist Edward Sullivan said.

Skyrocketing demand for cement has naturally driven up prices. Hogan of Wadman Corp. said ready-mix prices have increased as much as $20 per cubic yard in the past two years. Prices for other building materials, such as steel, lumber and drywall, have also been on a steep rise. "We’re paying close to $100 a yard, which is just crazy," he said. "When you’re talking about a Wal-Mart-sized project, that’s a lot of extra money."

At its Morgan County cement production plant near Croydon, Holcim US Inc. is working around the clock to keep up with demand, product manager Lance Stephens said. The Holcim plant recently received permission from the Utah Department of Air Quality to step up cement production in January and February, in an attempt to build reserves for the peak demand season that begins in spring. (Abstracted from an original report by Knight Ridder Tribune Business News)