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Katrina strikes at roofing industry still recovering from 2004 storms
By Rachel Pleasant
Staff Writer
Hurricane Katrina steered clear of the Charleston area, but builders here may be feeling her impact for a long time to come.
Still recovering from the 2004 hurricane season, when storms named Charley, Frances, Jeanne and Ivan battered Florida, roofing supply manufacturers and distributors caution that the Lowcountry could be in for short supplies of roofing products, particularly shingles.
“It’s going to be rough,” said Kenny Grayson, branch manager of Charleston’s Bradco, a roofing materials supplier. “This is one of the largest storms they’ve had. We probably won’t start feeling effects for a month because nobody can get down there to assess the damage.”
When the ripple effects of Katrina reach Charleston, Grayson said it will be in the form of even tighter supplies. The tighter the supplies, the longer the wait for materials to be delivered, throwing a kink into the construction schedule of new homes or remodeling projects.
“We’re still on allocation and have been since last year’s hurricanes,” Grayson said, adding that when disasters such as Katrina occur, roofing supply manufacturers send supplies to the hardest hit areas first.
Currently, Bradco needs an additional two to three truckloads delivered each month to meet demand. Each truck contains 200 roofing squares. One roofing square covers 100 square feet of a roof’s surface.
At GAF Materials Corp., a commercial and residential roofing manufacturer, the company’s 13 plants are running 24 hours a day, seven days a week, to keep up with demand created from the 2004 hurricane season.
Combined with the massive damage created by Katrina and a booming housing market, the roofing industry will need two years to return to normal, barring any other storms, said J.D. Hasselbach, director of sales for GAF’s southeast region.
“The first storm last year was Aug. 13. Now, a year later, we’re still on allocation. We’re not out from under the demand from last year, and our competitors are in the same position,” Hasselbach said. “There’s still a lot of repair work in Punta Gorda (the Florida city devastated by Hurricane Charley), and new housing starts are breaking records all over.”
Sales of new single-family homes in July reached a seasonally adjusted annual rate of 1.4 million, up 27.7% from the same period a year ago, according to the U.S. Department of Commerce.
When determining how much a customer will receive in the way of materials, Hasselbach said GAF looks at a customer’s buying history. If a customer bought $5 million worth of materials the previous year, that is how much that customer is going to receive this year.
The problem is that the amount of allocated supplies does not come close to meeting demand, a situation that is only going to get worse for builders across the Southeast as GAF pumps more materials into the Gulf Coast region.
“Who knows how long it will take in New Orleans, Gulfport, Biloxi and Atlanta. There’s a tremendous amount of roof damage from tornados. There’s a tremendous amount of demand for roofing materials,” Hasselbach said.
Builders and consumers here in the Charleston area can count on seeing longer waits for materials to be delivered, he said.
“There will be tighter supplies,” he said.
At Summerville’s Tucker Roofing & Repair Inc., owner Kenny Tucker said short supplies and long waits for deliveries are inevitable. For roofers, there is not much that can be done except endure such inconveniences.
“Last year there was a shortage of roofing supplies. Before, you could take for granted that any color shingle was going to be available right away. After the storms in Florida, it would sometimes take three weeks to be delivered,” Tucker said. “We’re going to feel it here. I think it’s going to be worse than Florida.”
Roofers have no way to prepare for hard times ahead. Though it may seem reasonable for a roofer to stock up on shingles, that is not a good business move because you don’t know what colors customers are going to want, Tucker said.
“You just have to ride it out,” he said.
As temperatures drop up north, Hasselbach said, GAF will dedicate its plants in the Northeast and Midwest—where roofing work slows considerably during the cold months—to manufacturing materials for the Southeast.
Between 9 million and 10 million roofing squares will be shipped to the South from northern plants during a six-month period beginning later this year. It may sound like a lot, but it will only go a short way in addressing demand, Hasselbach said.
Luckily for GAF, its plant in Mobile, Ala., was undamaged, he said. Because the roofing industry is considered a priority business, the plant regained power the day after Katrina hit. Production was only minimally interrupted.
In addition to short supplies and long waits for roofing materials, Hasselbach said roofers and consumers are guaranteed to see increasing prices for shingles.
“Costs will go up because of asphalt,” a key ingredient in producing shingles and one that is made from petroleum, Hasselbach said. “Crude oil 16 months ago was $32 a barrel. Now it’s $65 to $70 a barrel. Asphalt is 50% of the cost (of shingles). The prices are reflecting the cost of asphalt. Additionally, natural gas is up more than double, and natural gas is what a lot of our plants run on. In addition to that, we deliver on trucks, and the price of diesel is up almost double.”
The roofing industry imposed a price increase of nearly 8% at the start of September.
In the last year, said John Barry Hart, owner of Hart & Son Roofing & Guttering in Charleston, the cost of a roofing square has increased about $10.
As if shortages and increased prices weren’t enough, Hasselbach said homeowners may encounter yet another inconvenience: Simply finding a roofing contractor may be a challenge in the coming months.
“Typically what happens is roofing contractors tend to gravitate to the storm area. There are fewer roofers to do the work. That’s what happened in Florida,” Hasselbach said while driving from his Tampa office to Orlando.
“We had probably 5,000 roofers that came in out of the state. You’re going to see a lot of South Carolina workers over there.”
Rachel Pleasant is a staff writer for the Business Journal. E-mail her at rpleasant@charlestonbusiness.com.
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