Florida’s cement profits

Florida’s cement profits
Published: 18 August 2004

The Bush Administration is busy passing out checks to help Floridians rebuild after Hurricane Charley, a gesture that no doubt is appreciated. There is, however, another way it could support the reconstruction effort, and at considerably lower cost: Restore free trade in Mexican cement after 14 years of protectionism (reports the Wall Street Journal).

So far, however, the Bush Administration has given no indication that it will embrace this logical solution. For logic is not part of the dumping law. Once a tariff is imposed, the WTO only requires a review once every five years, and there is a built-in presumption that it will continue unless domestic producers agree to drop their case. Considering that they get a share of the proceeds from the tariff, there is little incentive for them to do so. Meanwhile... The wholesale cost of an average home is up by $5,000 to $7,000 because of shortages in cement, wallboard, steel framing and insulation materials, according to a recent study by the National Association of Home Builders.

In a survey of home builders, 41 percent of respondents nationwide said they faced a cement shortage in July, compared with 11 percent in May and 3 percent in March.

Some 29 states, including California and Nevada, are experiencing cement shortages, the Portland Cement Association said.

"The shortage is very real, and every cement provider is drying up," said Tom Holsman, spokesman for the Associated General Contractors trade group in Sacramento.

In Northern California, where demand for materials has been nonstop during the region’s five-year residential real estate boom, cement prices recently hit $105 per cubic yard, said Andy Powers, purchaser for Cobblestone Homes in Santa Rosa. "A few months ago, it was in the mid-$90s," Powers said.