Builders Facing Inflation, Ponder Bankruptcy

Builders Facing Inflation, Ponder Bankruptcy
PRESS RELEASE Citizens for Corporate Accountability

(SEATTLE) 04/05/04 - It’s happening all across the country. Builders for all kinds of projects, from bridges to homes, are faced with skyrocketing prices for everything from plywood to steel. Now, according to industry insiders, builders and contractors may be facing bankruptcy.

Almost overnight, prices have skyrocketed, as American homebuilding jumps at record rates, and as Chinese factories--acting as factory floors for both US and Chinese production--consume at record rates.

The problem comes as various builders, anxious to meet demand, drew up contracts well in advance of procurement and actual construction. Especially hard hit are builders of steel-intensive structures such as bridges. But the impact goes far beyond just bridges. “Even steel rebar prices have gone way up,” says one insider--and rebar is used in most concrete casting.

US homebuilders may be especially hard hit, having planned backlogs of many months. But in some cases, costs may be passed along--according to an insider at a major construction bonding firm, state legislatures are being asked to fund the gap on public projects. Yet, higher funding might be difficult, with tight state budgets. Ultimately, some costs have to be absorbed by builders due to uncertain prices at subcontractors. If buyers end up paying, they face surcharges financed into mortgages, jacking up already high prices-charges that they might never recover. So much for “cheaper” low-interest mortgages.

The truth is, nobody knows what will happen over the next few months. “They’re talking about bankruptcies, ” says the bond industry insider.

[NuttyFluffers]

1. I'm surprised there's less replies to this

This is really sad. These poor people are trying to do their job, building and repairing stuff that expands and maintains our country's infrastructure. And our foolish economic/trade policies are destroying them.

Sure there are some contractors that aren't nice, moral people, but there's also plenty of good, honorable contractors too. To let this essential industry fall is so unfair and deeply negligent.

The ramifications of this is going to be so far reaching. So many good people, contractors, middlemen, laborers, skilled workers, are going to be seriously hurt. And in turn that's going to hurt their communities.

No sir, I don't like it. Don't like it at all.

[dweller]

2. so, i suppose those 71,000 'new' jobs just created

last month in the building industry, will just disappear by next month, along with others...

dp

[Florida_Geek]

3. What Inflation Greenspan and * told us there

was no Inflation.

[bambo53]

4. My paranoia

I think the scariest thing is all the people who have taken advantage of Die-co.com type home refinancing, get rich quick schemes. Those easy monthly payments are gonna be hard to come by when you're out of a job and just a few companies are gonna own all the housing in the country.

[NewYorkerfromMass]

5. As an architect I know steel has gone up 30%

all steel- from heavy structural down to metal studs has gone up at least 30%.
It's affecting everything.
The China impact is real.

[The Zanti Regent]

8. Don't forget that Reagan killed off America's Steel industry.

He sat back and did nothing while Westen Pennsylvania died. Now you have no significant domestic steel industry left!

[pacifictiger]

6. I suspect most of these contractors

are big project builders rather than single home dwelling builders. I know liability insurance rates have soared for multidwellings i.e. condos etc, and states are broke forcing them to delay infrastructure contracts i.e. roads, bridges, etc. so I'm not surprised at this report. The only thing that seems to be hot right now is high end luxury homes for those in the upper tax brackets.

[leftchick]

7. A huge percentage of Builders in my area donate to Repukes...

I used that nifty search engine posted a couple of weeks back. Most of the Lawyers were for Edwards (I am in NC)and almost alll of the Builders gave to bush*! Go figure...

[sam sarrha]

9. China is sucking resources out of the USA raising prices it isn't inflation

... Steel has gone up 16% this year and will go up much higher..the demand is so high from china.

[leesa]

11. That's free trade.

[brokensymmetry]

10. This may be a harbinger of a slow down

Which means we go from jobless recovery to job loss recession.

How many millions of jobs will vaporize? I dread to think of it.