OGDEN -- Construction of the new Treehouse Children's Museum, one of the first tangible signs of rebirth at the former Ogden City Mall site, was progressing smoothly and steadily until the time came to start putting up the steel frame about a month ago.We discussed the potential problems resulting from concrete price increases in an earlier WCF article, but this is the first we've recently heard about steel shortages.
Construction crews were ready, but the steel for the project wasn't there.
"It seems like a wave of demand hit just about the time we pulled the trigger," said Dan Osmond, site foreman for Big-D Construction, the general contractor on the project. "Things were slower in the spring, but then the demand hit like a tidal wave just a couple months ago."
The lack of available steel delayed the project only about two weeks, but it shows how a worldwide surge in demand for steel and other building materials is having an impact everywhere, including in the Top of Utah.
Shortages of steel have delayed some building projects in the area, and rebounding prices this summer have caused headaches for project bidders who see project costs rise from the time they are bid on to the time materials are delivered.
Treehouse Museum director Lynne Goodwin said the approximate $3.6 million price tag on the project has grown some due to material cost increases, which Big-D and the team of subcontractors and suppliers on the project have helped offset.
"There have been challenges, but because we're a nonprofit, everyone involved has tried to help keep this project in line with our budget," Goodwin said.
Last year at about this time, steel shortages, resulting from frenzied industrial activity in China and elsewhere in Asia, caused a severe price spike that's reflected in the above past year's stock charts of U.S. Steel and Nucor (which is mentioned in the Std-Ex article.)
The steel shortages and price increases that occurred just about this time last year didn't abate until about March of 2005. Steel is a "cyclical" commodity, the price of which responds powerfully to changes in world supply and demand. If there's a persistent steel supply shortage in the works, as occurred last year at this time, the whole Recreation Center project could be in severe jeopardy, unless Ogden City can lock-in something resembling current price terms with the general contractor, Ogden-based R&O Construction, prior to expiration of its bid at the end of this month.
What are the chances that R&O Construction will want to take that risk?
The Ogden City administration has to be sweating bullets over this.
Comments anyone?
