Aug. 19--Just a few years ago, companies were importing cement to keep up with demand, and drivers couldn't get trucks to construction sites fast enough.

Now, a housing slowdown and high fuel prices are hurting Houston concrete companies with a national reach.

Housing starts nationwide in 2008 are expected to be 36 percent lower than last year, marking the third year of declines, according to Skokie, Ill.-based Portland Cement Association. The group predicts a rebound in 2010.

"It was a much bigger, steeper residential drop than I think anyone envisioned," said Robert Hardy, executive vice president and chief financial officer of Houston-based U.S. Concrete.

Business is even off in Houston, where new-home construction, though down 23 percent in the second quarter, is not as bad as in many other parts of the country.

And with fewer houses going up, demand for building materials decreases.

In May, the association said the cement consumption decline of the past three years made this "one of the worst industry downturns since the Great Depression."

Monterrey, Mexico-based Cemex, which has its U.S. headquarters in Houston, reported that its U.S. cement demand fell by 7 percent for the second quarter compared with the same period last year.

The housing slowdown in Florida propelled Cemex to convert its Tampa terminal into an export instead of import terminal. On July 30, it began shipping its excess domestic product to the Caribbean every 10 days.

And U.S. Concrete, which has concrete operations outside of Houston, reported that its second-quarter sales dipped to $193 million from $195 million during the same three-month period last year.

Now, the construction slowdown has spread to the commercial and public sector.

"The commercial and public sectors were strong last year," said Francisco Chavez, an analyst with BBVA Bancomer in Mexico. "Now we're starting to see a deceleration in those sectors."

The industry is pushing Congress to approve a highway bill to foster more road building.

It's not just the construction sector slowdown hurting concrete companies. They're also shelling out more for energy.

"Now we have the unprecedented situation of the deepest demand decline and escalating energy prices," said John Bloom, Houston-based chief economist for Mexico's Cemex.

Energy accounts for 41 percent of the cost of producing a ton of cement, which goes into making concrete, and 22 percent of the cost of concrete, according to the Silver Spring, Md.-based National Ready Mixed Concrete Association.

To deal with the cost increases and demand decreases, concrete companies are increasing their prices. Cemex recently announced concrete prices will rise by $25 per cubic yard nationwide beginning Oct. 1.

U.S. Concrete has also increased its prices.

Hardy said each market is different, with the company suffering losses in demand in cities like Detroit, where the shrinking car industry means fewer homes are under construction.

Prices for other building materials, such as steel and copper, have also increased, BBVA's Chavez said.

These hard times could lead to some smaller companies shutting down, Chavez said.

"I think it could lead to a major consolidation in the industry in the United States," he said.

jenalia.moreno@chron.com

-----

To see more of the Houston Chronicle, or to subscribe to the newspaper, go to http://www.HoustonChronicle.com.

Copyright (c) 2008, Houston Chronicle

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NASDAQ-NMS:RMIX, NYSE:CX,