Reply #28: Oil Isn't Only Constraint on the Economy [View All]

[54anickel]

http://www.thestreet.com/_tscs/comment/aaronpressman/10179883.html

Sometimes the truest picture of the economy can be assembled not from the top down but from the bottom up. While higher oil prices are getting a lot of the blame for the recent "soft patch" of growth and job creation, there are other choke points that also are responsible for the slowdown.

Take a look at some local newspaper headlines from around the country over the past few weeks:


"Cement shortage delays projects" -- St. Petersburg Times

"Shipping by rail still off track" -- The Dallas Morning News

"Trucker shortage hurts freight lines" -- The Denver Post
Although each paper is reporting on events within its circulation area, the trends uncovered are having a nationwide or, in some cases, worldwide impact. Even as oil prices fell Tuesday for the third straight day, prices of other commodities are still rising and the transportation infrastructure is constricting.

Take the cement shortage. It started in Florida but it has spread nationwide. The building boom in China is diverting supplies that used to come to the U.S., which imported 22% of its needs last year.

Largely as a result, 41% of homebuilders couldn't get enough cement last month, up from just 3% in March, according to a survey by the National Association of Homebuilders (NAHB). The survey also found 26% of builders experienced shortages of gypsum wallboard, up from 16% in March, and one-fifth needed more insulation, twice the level of March.

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