Cement shortage yet to strike Northwest

While a cement shortage has threatened new construction projects in the Southeast and Gulf Coast regions of the country, contractors in Oregon and Washington say they've seen little evidence that the shortage is spreading to the Northwest.

Some states have seen cement prices skyrocket and distribution lines dry up, which has postponed construction projects and idled workers. Many of these states are receiving less of the imported cement that they rely on and, as a result, are producing less concrete.

Contractors in the Northwest don't rely on imported cement as strongly as contractors in other states. Florida, which has been hit harder by the cement shortage than any other state, relies on imports for 40 percent of its cement supplies. Other states that rely heavily on imported cement, like Nevada, Texas and California, as well as most states in the Southeast, have noticed shortages as well. But with more locally used cement produced in the Northwest, contractors in Oregon and Washington haven't had trouble.

No one's having problems (in the Northwest) getting cement, but we manufacture cement so that's a big help, said Ted Aadland, president of F.E. Ward Inc., a Vancouver, Wash.-based contractor. We're not seeing, on a project basis, any problems at this point.

The Oregon Department of Transportation hasn't noticed a shortage, either.

I have not heard anything about it yet, said Jay Remy, ODOT highway division spokesman.

Northwest cement suppliers' beliefs differ on whether there's a chance of a shortage. At Eugene Sand and Gravel, we're not experiencing any problems as of yet, and we're not hearing that we're going to have a problem this season, said Scot Priaulx, the company's sales manager. I know California's having a big-time problem, but not us.

But at Ash Grove Cement Co., while production hasn't been an issue, distribution is, due to a lack of available train cars to carry the company's cement.

There's a major problem with (the) railroad right now, said Lance Latham, Ash Grove director of communications and public affairs. There hasn't necessarily been a shortage in cement but in transporting that cement to distribution points. We have a plant in Durkee, Ore., and a terminal in Portland, and it certainly affects us.

Still, Latham thinks any troubles will be resolved soon and isn't particularly worried about a shortage.

We're always concerned when we can't supply our customers with what they want, he said. But once the railroad gets back up to capacity I think we'll be fine.

Cement prices in the Northwest have been relatively stable. At Perlo McCormack Pacific, we had a bump here in January of about 10 percent, but that was the first bump we've had in three years, so it hasn't been too bad, said Terry Edgar, the general contractor's chief operating officer. But costs of other materials, particularly steel, are concerning many in the industry.

We are seeing rebar, structural steel - everything's climbing high, said F.E. Ward's Aadland. We're going to the state, asking them to help contractors. It's abnormal, way above anything we've ever seen. I've never seen (the cost of steel) shoot up as high in such a short amount of time. We're all reading the market, trying to guess where we're at at this point. We just don't know.

The rising cost of steel had already concerned Edgar. Now, rumors of a cement shortage have made him doubly nervous.

We've all heard about the steel price going up, Edgar said. And now hearing that there's a cement shortage (in some parts of the country), that does concern me, working in the private sector. When you couple that with rising interest rates, that's not good for increased growth.

Even if the Northwest doesn't see a cement shortage any time soon, the volatility of the construction market has convinced Aadland to proceed with caution.

It's a changing market and it's something all contractors have to be really careful about, he said. The risks out there are tremendous.

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