www.msnbc.com By Melissa Francis CNBC According to the National Roofing Contractors Association, 80 percent of the products used for residential and commercial roofing are derived from oil.     March 12 —  The price of crude oil has risen to a high of over $38 a barrel in recent days, putting pressure on prices at the pump and for home heating. But there’s another industry that you might not immediately think of that’s caught between the dueling forces of a slower economy and the higher cost of materials.   YOU KNOW THAT tar paper on the roof that keeps the rain out, and the shingles and tar paste? Well, the vast majority of those products used in the roofing industry are petroleum based. And the interruption in supply from Venezuela along with the spike in oil prices is creating havoc in an industry already beaten down by a sluggish economy.        With a harsh winter, Jerry Cawley of Homestead Roofing has seen the volume of his business decline — this as the price of crude oil has spiked, significantly narrowing his margin.        “With the economy it’s been a little slow, so I don’t think the cost of the increase [in oil prices] will be passed on right away to the homeowners,” Cawley says. “I think that the small business, the roofing contractor, will have to absorb some of that cost.”        According to the National Roofing Contractors Association, 80 percent of the products used for residential and commercial roofing are derived from oil.        Climbing prices for crude, brought on by the specter of war with Iraq, have created tremendous uncertainty in an industry so dependent on the black gold, according to Bill Good of the NRCA.        “We just don’t know what the prices are going to do other than that they are just going to go up. But even more important than that, we’ve had a lot of issues of availability,” says Good. “We’ve had some spot shortages and it makes it very difficult for roofing contractors in particular to plan their work for the year.”        The uncertainty was aggravated by the strikes in Venezuela, a country where a quarter of the industry’s crude originates.        “The roofing industry relies to an unusual degree on Venezuelan crude,” says Good. “It turns out to be just a better crude oil to produce asphalt from, so the effect of the strike was really pretty devastating to our industry.”        The best substitute for Venezuelan crude is, ironically, the oil found in Iraq. An interruption in the flow from that country, or a further rise in prices, could seal the fate of many contractors.        “It has the potential to really be devastating,” says Good. “It will depend of the amount and the nature of the price increase and the availability. We’re seeing contractors getting very insecure about bidding work that is anything other than short term because they don’t want to lock into prices that may not be realistic 60-90 days from now,” he adds.

www.miamitodaynews.com By Susan Stabley    Miami's luxury real estate market may get a boost from foreign investors now that a proposal to further limit the length of stay for international visitors has been withdrawn.    Gov. Jeb Bush applauded last week's decision by the Bureau of Citizenship and Immigration Services, formerly known as INS, to withdraw a rule that could have limited foreigners to 30-day visits instead of up to six months.    According to the Governor's Office, in 2001 more than 8 million international visitors came to Florida. Tourism is the state's top industry, comprising 20% of Florida's budgeted general revenue and generating more than $50 billion in economic impact annually.    Just this month, the Immigration and Naturalization Service, was disbanded and absorbed by the new US Department of Homeland Security. The Department of Justice dropped the rule change before making its official transition, though it is still unclear whether the new department will try to revive the limitations.    Alex Sanchez, CEO for the Florida Bankers Association, said the proposed rule could have cause a major divestiture of Florida holdings by foreigners.    International visitors generated more than $500 million in sales tax revenue, Mr. Sanchez said. Substantial portions of the 8 million international visitors are part-time residents, he said, and own property, buy cars and invest in local businesses.    "That's a big part of the economic diversity in the state of Florida," Mr. Sanchez said. "This is important news for us."    The immigration proposal has also been a serious issue for real estate insiders like Jean-Charles Dibbs, a real estate partner at the law firm of Shutts & Bowen, who represents domestic and foreign clients who buy and sell luxury waterfront single-family homes and condos.    In the wake of 9/11, Mr. Dibbs said, he has had to move a significant amount of foreign-owned real estate - both vacation homes and income-producing properties. But balancing the demand to sell is a surge of buyers predominantly from Argentina, Colombia and Venezuela, many who move here with large investments.    International clients make up 75% of Mr. Dibbs' business.    In the past six months, Mr. Dibbs said, he has handled transactions of properties valued from $2.7 million to more than $5 million. Most are in Key Biscayne, South Beach or the islands along the Venetian Causeway and the demand for waterfront property has cause a "feeding frenzy," he said.    Toni Schrager, a long-time high-end real estate agent and one of the founders of Avatar Real Estate Services, agrees that many luxury buyers are from Argentina, Colombia and Venezuela, as well as Brazil and Mexico. Attitudes are split, though, with as many buyers and sellers taking a conservative stance, as are those who are operating like it's "business as usual," she said.    For real estate agents, the visa issue created "nervousness," Ms. Schrager said.    "We didn't see mass selling, but there was an undercurrent," she said. "Realtors talked about a concern."    Still, among property owners a greater concern revolved around the ramifications of selling.    "Many are afraid that they won't be able to get back in the market if they sell, that prices would become much higher than they are comfortable with."    "There's a lot of uncertainty," she said. "But Miami seems to have its own economy. You can't compare us to other places."    "It's a microcosm here. Miami is already the capital of Latin America," Mr. Dibbs said. "The economy is largely dependant on South American investment. We can be in a recession countrywide and my business will not feel it because of the investment coming from South America."    Mr. Dibbs said he keeps asking himself when the bubble might break.    "So far, it hasn't slowed down. Interest rates are low and Miami is positioning itself as a world-class city and a cultural Mecca... It's causing a lot if people to take notice."

smartmoney.com March 11, 2003

Market Monitor  DJIA  7821.75 269.68   Nasdaq  1340.78 61.54   Rus. 2000  355.44 9.50  LECO 17.30 1.04 6.40%

CLEVELAND (Dow Jones)--Lincoln Electric Holdings Inc. (LECO) warned first-quarter earnings before items could fall as much as 22% from a year ago because of declining U.S. sales and higher pension charges.

In a press release Tuesday, the maker of arc welding products said it expects first-quarter earnings of 32 cents to 34 cents a share, excluding a goodwill charge for a change in accounting principle and certain rationalization charges.

Analysts surveyed by Thomson First Call were expecting earnings of 40 cents a share.

In the year-ago first quarter, Lincoln posted earnings of 41 cents a share, excluding the effect of an accounting change and rationalization charges.

Shares of Lincoln were halted on Nasdaq at $18.98, up 39 cents, or 2.1%. The company's shares fell to a 52-week low of $18.25 on Monday.

Lincoln said the economic and political difficulties in Venezuela have caused the results there to be below expectations.

The company is forecasting flat first-quarter sales compared with year-ago sales of $248.4 million. U.S. sales were down about 5% due to the decline in the demand for welding products in the stagnant U.S. industrial market.

Last month, Lincoln said pension costs would be higher by $15 million in 2003. However, the company said Tuesday the principal reason for the expected earnings decline is lower domestic U.S. market sales, resulting in lower gross profit.

To offset the effect in future quarters, Lincoln said it implemented a program to reduce and eliminate costs, including salaried personnel reductions and organizational consolidations. The benefits of these actions will begin in the second quarter of 2003. A company spokesman wasn't immediately available to comment on these cost-cutting actions.

Lincoln Electric will report first-quarter results on April 16. Company Web site: www.lincolnelectric.com -Stephen Lee; Dow Jones Newswires; 201-938-5400 (END) Dow Jones Newswires 03-11-03 1723ET

reuters.com Wed March 12, 2003 08:52 AM ET (Adds more detail from report)

WASHINGTON, March 12 (Reuters) - The U.S. trade deficit narrowed sharply in January to $41.1 billion, but was still the second-highest on record despite an upturn in exports, the government said on Wednesday.

Rising oil prices ahead of a possible war in Iraq helped keep the trade deficit at near-record levels, the Commerce Department data showed.

Oil prices in January were the highest since November 2000, with the increase from December was the largest month-to-month jump since September to October 1990, which followed Iraq's invasion of Kuwait in August of that year.

The 8.4 percent reduction in the trade gap from the record in December was the largest monthly drop in just over a year and exceeded market expectations. Analysts polled before the report pegged the January trade deficit at $42.8 billion.

In a possible sign of weakening U.S. demand, imports fell 2.0 percent to $123.0 billion, but still were high by historical standards.

Exports rose 1.6 percent to $81.9 billion, led by higher shipments of capital and consumer goods.

U.S. imports from Venezuela, a major oil producer, in January fell to their lowest level since February 1989, as a general strike crippled that country's oil exports.

The U.S. trade deficit with China narrowed fractionally to $9.4 billion in January, while the monthly trade gap with the 15 member states of the European Union dropped by nearly 30 percent to $6.5 billion.

Tensions between the United States and two key European Union members, France and Germany, have rattled companies on both sides of the Atlantic, which fear the foreign policy disagreement could spill over into the trade arena.

Jean-Francois Boittin, economic counselor at the French Embassy, said he saw little chance any European country would express its displeasure by blocking imports of U.S. goods.

"I think cooler heads will prevail," Boittin told Reuters in an interview.

www.gomemphis.com By Jane Roberts robertsj@gomemphis.com March 12, 2003

An airline industry trade group predicts "chaotic industry bankruptcies" if war in Iraq cannot be avoided.

In a report designed to encourage Washington to grant as much as $9 billion in tax relief and other financial aid, Air Transport Association president James C. May said that even though airlines have slashed costs since 2001, a war will hurt them further.

"The prospect of a forced nationalization of the industry is not unrealistic," May said. "It would be a last-ditch effort, but it is not impossible."

Under a "most likely Iraqi war scenario," May outlined a host of grim assessments, including that the workforce - already down 100,000 workers since 2001 - would be cut another 70,000.

He predicted that flights would drop by 9.5 percent - or 2,200 a day - and that in a war that lasted 90 days, passenger load for the year would drop by 52 million people - more than in the 1991 Gulf War.

Fuel costs will only rise, May said, due to a low inventory heightened by the strike in Venezuela. During a war, supplies from the Middle East would be disrupted.

Darryl Jenkins, head of George Washington University's Aviation Institute, said those forecasts are reasonable but that Congress is unlikely to help any distressed industry twice.

Shortly after Sept. 11, 2001, the government reimbursed the airlines $5 billion for revenue lost when the airspace was closed immediately following the attack. It also set $10 billion aside in loan guarantees.

But the requirements were so stringent that very few airlines were eligible beyond those in bankruptcy, said Larry Cox, president of the Memphis-Shelby County Airport Authority. Less than $1 billion was used.

Steve Hansen, spokesman for House Transportation Committee chairman Don Young (R-Alaska), said the size of Congress's previous industry bailout dampened lawmakers' appetite for giving the airlines the tax cuts they say they now need. "It's not to downplay the problems the aviation industry is having, but at what point do you set a limit to how much you can give to one industry?" he said.

ATA represents most major passenger and cargo carriers.

Asked about May's nationalization scenario, ATA spokesman Michael Was com said, "We hope it never comes to that. But in these tough times, we risk the industry ceasing to exist as we know it today without some intervention."

Cox said that nationalizing aviation "will be like the post office running the airlines. I don't believe that is in the best interest of the United States.

"I certainly have to agree that the future in aviation, even without war, looks bleak," Cox said. "Obviously, there are going to be some major impacts. It's hard to gauge how deep and how long they would last, but it certainly is not good."

Cox and Wascom said the government could start helping the airlines by reducing their tax load.

"The airlines are the most taxed industry in the United States. They are taxed more than cigarettes, more than alcohol," Cox said.

One option would be a tax holiday - from the start of the war to one year after it ends - from six taxes airlines pay into a trust fund. The taxes include user fees on cargo and passengers, a $2.50-per-passenger security surcharge and a 4.3-cent-a-gallon jet fuel tax. That would save the airlines about $9 billion.

Cox and Wascom also cited security and other regulatory costs the airlines have had to absorb since Sept. 11, 2001 - about $4 billion worth. "For an industry that supposedly was deregulated in 1978, it isthe most regulated deregulated industry in the nation. They certainly need to remove the unfunded mandates,"Cox said.

Security measures alone cost Northwest Airlines, the major carrier at Memphis, $40 million to $60 million a year, Cox said. Screening the catering services costs NWA $11 million, he added.

Plus, Cox said, Northwest and other airlines are being penalized because they cannot carry U.S. mail under the heightened security, but they must offer federal air marshals room in first class.

Wascom suggested that the government take over passenger and property screening, and intervene with insurance coverage, perhaps by extending permanently a policy it offers now through the FAA.

Jenkins, Aviation Institute director, said the industry needs long-term restructuring. "I'd rather see that happen than government get involved" by nationalizing the airlines.

• Jane Roberts: 529-2512