The fallout from Hurricane Katrina is expected to drive up the cost of building materials and local suppliers may see price increases for certain types of materials BCM McAlpine President Alan Burland says.

As the US Gulf Coast region recovers from the devastation of Katrina the demand for construction materials has raised fears that prices will rise.

A report by Davis Langdon suggests construction costs will be affected both in the short term and over the next several years.

These developments come at a time when oil prices have been rising and the US construction industry is already stretched due to the spike in prices for steel, wood products and concrete.

?We expect prices to rise for materials such as steel, aluminium and lumber ? especially Southern Yellow Pine,? Mr. Burland said.

?In the past two or three years there has been a large construction boom in China for commodities such as steel and metal products and Hurricane Katrina will continue to exacerbate prices, if China continues buying these materials.?

Mr. Burland said industry suppliers will have to competitively tender prices and look at specifications to make sure they are competitive on a project by project basis.