Katrina hits cement supply.

All bets are off in the current cement crisis following the worst natural disaster in the nation's history, according to the Associated General Contractors of America.

With the first reports of shortages now trickling into the Tri-State area, worries are that Hurricane Katrina will add to an already dire situation, said Ken Simonson, chief economist for the AGC.

"I think Katrina has probably knocked out some cement producing capacity and foreign imports may head to the Gulf region instead of other parts of country," said Simonson. "It is now possible we will hear of shortages in areas that previously had sufficient cement." Just last week, the AGC was welcoming efforts by politicians demanding swift action to end the current US-Mexico trade issues being blamed for a growing cement shortage in the US.

The AGC has been asking the Commerce department and the Southern Tier Cement Committee--a collection of mass producers in the southern states--to withdraw a ban on cheap Mexican cement being sold in the US that it claims has resulted in a 55% percent increase in costs and a serious shortage in over 30 states.

AGC CEO Stephen E. Sandherr said that the long-awaited enactment of the surface transportation and energy bills last week would add to cement demand at a time when construction spending has already risen nine percent from last year, while domestic cement production has barely budged.

"It is high time for other cement producers to admit they are not being 'injured' by Mexican cement imports and to agree with Commerce to a suspension of the 15-year-old anti-dumping duty on those imports," Sandherr said. "The duty is causing needless hardship for contractors and concrete suppliers in states all across the country."

Then Hurricane Katrina barreled into Gulf Coast on Tuesday, virtually obliterating everything in the path of its 145 mph winds and sending oil and gas production into a nosedive.

The AGC is now monitoring closely the impact of Katrina on cement supplies.

"There will be a ripple affect across the country from Katrina," said Simonson. "The disruption to ocean, barge and rail transport from Katrina, and the loss of power to cement plants in the storm's path, win cut further into cement supplies. At the same time, the urgent need to stabilize and rebuild roads, other infrastructure and buildings will increase demand for cement and other materials."