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Impacts of Hurricanes on Construction Markets


According to a recent AGC article, the impact of Hurricane Harvey on the construction industry is expected to be felt far beyond the devastation and destruction experienced in Texas. The most significant impacts will be to construction supply chain, material costs, and labor. While immediate efforts will be centered on clean up, the rebuilding efforts, expected to begin in 2018-19, will require large labor and material demands. Fulfilling labor demands is currently a problem for many general contractors and the effects of Hurricane Harvey is expected to stretch a tight labor supply market even thinner. Additionally, material prices are expected to rise with increased demand and the availability of supply.

The port of Houston is the largest importer of steel products in the country. Hurricane Harvey has put major stresses on the port, which include loss of inventory, reduction in their ability to take imports, and destruction caused by the storm. In addition to the rebuilding efforts expected to require large amounts of steel, these factors are expected to drive increases to the price of steel, which had been declining prior to the hurricane. Other materials that are expected to experience price increases include diesel fuel, gasoline, PVC feedstock/resin, and natural gas. Overall, general contractors may be able to find work by helping with the rebuilding efforts but their costs are expected to increase as Hurricane Harvey disrupted the procurement of certain materials and increased the demand for labor.

The article was published prior to Hurricane Irma making landfall in Florida. The additional destruction caused by that hurricane will only magnify the impacts to labor and material markets previously discussed.

See the full AGC article here:



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