Hard Times

For more than a year, one of the strengths in the U.S. economy has been the building industry, which has been booming as a result of high demand for new houses, and an abundance of fine weather for construction. Alas, times are so good that they are turning bad: builders are now grappling with a severe cement shortage.

After first appearing on the West Coast, shortages have cropped up throughout the Midwest and are now be deviling construction in the East, partly because West Coast builders have been snapping up supplies. As a result, many projects are stalled, and cement prices are climbing. Some big West Coast suppliers are going as far as Japan and Korea for raw materials. California's big Kaiser Cement and Gypsum Co. plans to import 10% of the materials it needs from Japan this year.

Though unexpectedly strong demand is the main cause of the shortages, cement executives cite a number of other reasons for their woes. California suppliers say they are short of cement partly because of the lengthy West Coast dry spell: instead of having to knock off during the rainy season, builders have been able to work year round.

Another complication: many plants that failed to pass new pollution regulations have had to close, and capital that would have been used to expand capacity has had to be spent to meet environmental standards. So anxious are construction men about this situation that the National Home Builders Association has asked the Environmental Protection Agency to allow cement makers more time to install antipollution devices and permit the reopening of some plants that have been shut down. But even if the EPA were to agree, some builders may be unable to get the cement they need before the first freeze.

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