Hurricane Katrina is expected to give inflation in the construction industry a second wind. Prior to the storm, the industry gradually was recovering from last years resurgence of inflation. While it is too early to determine the full impact of the storm on construction costs, the uncertainty it has stirred up undoubtedly will lead to higher bids for projects just to cover the new level of risk.
Katrina initially shut down projects in the area and put many others on hold. But that will not dent the tremendous demand for labor and materials being generated by the construction industry, which is on course for another record year.