Situated 60 miles north of Gulfport, Miss., Mitchell Tools took a pretty good hit when Hurricane Katrina pummeled the Louisiana, Mississippi and Florida coasts in August. Based in Hattiesburg, the industrial distributor of construction equipment and supplies didn't have much time to recover before the phones started ringing off the hook with contractors in fast need of generators, tools, consumables, safety equipment and other items.

"It was completely crazy," says Mike Mitchell, owner, who scrambled to fill orders during a time when no freight transportation was being allowed into the area. "We were sending stuff out, but nothing was coming in. In fact, we're still trying to get our stock built back up."

Credit the "lean inventory" trend with creating some of the issues, says Mitchell, who admits that most distributors just don't stock up on inventory like they once did.

"We've definitely gotten spoiled," he explains. "Why warehouse items when you can get a constant flow of deliveries every day? Unfortunately, when that flow stopped for a week or so, we definitely felt it."

For construction distributors like Mitchell Tools, the impact of Hurricanes Katrina and Rita has been a mixed blessing. On the one hand, no one wants to see such a powerful storm impact a region the way those two ferocious hurricanes did in August and September. On the other, the cleanup and subsequent rebuilding is expected to stoke demand for their products and services over the next few years.

"It's been good for business," says Mitchell, who has seen a particularly strong demand for safety equipment and supplies, thanks to OSHA's stepped up oversight of the cleanup and rebuilding efforts in the Gulf region. New customers are also coming the distributor's way. Where Mitchell Tools once did the bulk of its business with the construction market, a large university and a medical facility, customers of all sorts are now coming out of the woodwork.

"We're getting an influx of customers from out of state—from roofers, to tree and debris removal firms, and everything in between," says Mitchell.

Construction distributors located on the outskirts of the hard-hit area are also seeing an upswing in business that most expect to last for at least the next one to two years.

At Builders Tool and Fastener in Lafayette, La., for example, the distributor's geographic reach has grown from the typical 40-mile radius, to a current 140-mile radius. Most customers are asking for nail guns, nails, staples and safety equipment, says Marion Moore, president.

For the most part, Moore says the firm has been able to fill their needs, despite the fact that deliveries coming from the western and eastern U.S. slowed considerably in the storm's aftermath.

"We're on the same parallel line as the affected territories, so freight has definitely been affected," says Moore, who expects the situation to improve over the next few months as transportation infrastructure repairs are made. He doesn't foresee any issues getting materials to jobsites, or finding adequate labor.

"Over the next six to 12 months, I expect business to be pretty good overall," says Moore. "I've been through a couple of other hurricanes, and they've always had a positive impact on our business."

At United Tool and Fastener in Houston, Bobby Williams, president, has stocked up on cleaning supplies, trash removal equipment, water pumps and generators. With several hurricane-devastated areas still inaccessible, Williams has yet to see his distributorship's business increase as a result of the storms, but he does expect to see higher demand for products once the roads are cleared and the insurance checks are sent.

"Most of the towns from Houston east to Biloxi are pretty much flattened out, which means most of the contractors are going to have to come from the east or west," Williams says. "When that happens, it should kick up business for construction distributors in Georgia, Alabama and back this way into Central Texas."

To make sure his firm's warehouses contain the right mix of products to fulfill those contractors' needs, Williams has been working closely with vendors to keep deliveries coming on the items that will be necessary for rebuilding.

As of October, he says, shipments were "close to normal," with UPS and Federal Express still experiencing delays.

For now, Williams says much of the Gulf Coast area is in limbo as cleanup crews work first to assess the hardest-hit areas, and then secure the funding necessary to start rebuilding.

"I've heard that some of the commercial buildings and hotels are already trying to negotiate contracts to get their facilities repaired," says Williams. "But as of yet, no one has any work booked, and everyone is leery of the money situation. They want to make sure the money is in place before committing to any new or restoration projects."

Also in Houston, Hou-Tex Construction Fasteners, Inc., has been helping some of its contractor, roofing and masonry customers stock up their trucks for trips to Louisiana to help with the cleanup and rebuilding effort. Tom Cassidy, chairman of the board, says sourcing goods has not been a problem, although dealing with the rising cost of such goods has been challenging. In particular, demand right now is for Visqueen waterproofing materials, which he says have been in short supply since the four hurricanes hit Florida in 2004.

Going forward, Cassidy sees good opportunities for construction distributors over the next few years, based on the sheer numbers of residential homes, commercial buildings and major infrastructure components that suffered under the wrath of Katrina and Rita.

"It's not going to do anything but get better," says Cassidy. "We're already seeing opportunities surface, and the rebuilding efforts really haven't even gotten started yet."

As funding begins to make its way into the Gulf States, expect to see more contractors turning to their industrial distributors for critical equipment and supplies. And while material shortages and the rising cost of goods are sure to hit contractors where it hurts, John Martin, chair of the Building Construction Management Program at the University of North Florida in Jacksonville, says distributors can expect at least a few years of good business as a result of the storms.

"It's going to be several years before the Gulf region gets back to any sort of normalcy," says Martin. "Right now, we're looking at several more months of demolition and disposal before any rebuilding can even get started."

That fact isn't lost on Mitchell, who sees the devastation in his own community and realizes that contractors, homeowners, business owners and other entities will be calling on his firm for equipment and supplies for the next few years. Of particular concern right now, he adds, is the availability of labor. With all able-bodied individuals being called on to run chain saws for $50 an hour, he says finding help has been difficult. Challenges aside, he's bullish on the construction industry's future in the region.

"There's just so much that has to be rebuilt," Mitchell says. "I don't see any end in sight for at least the next two to three years."