Dear Friends:
Happy New Year! I hope that 2008 is a good year for both you and your company. As I write this, there are mixed signals about the construction economy. I get more confused after every forecast that I read. To see several different forecasts (so you, too, can also be confused!), please go to our website and click on “Industry News.”
Despite the construction economy being challenging, 2007, due to your support, was another record year for us. This couldn’t have happened if it were not for your support, the addition of several new product lines, and the addition of several new experienced salespeople. When the market is not cooperating, you can still find a way to succeed by getting creative and branching out into new areas, opening additional offices, and the like. Some people use a downturn as an excuse to justify poor results, and others “put the pedal to the metal” in a downturn. We are doing the latter.
Last January, when I announced our new logo and name, I also announced that we were going to put a major emphasis on education for all of our associates in 2007. I am pleased to report to you that last year we presented 27 educational seminars to our associates. This was so our salespeople would be the most knowledgeable salespeople with whom you will deal. We also held two full-day sales meetings where suppliers did hands-on demonstrations of their products. The overall plan was to add to the already large body of knowledge our salespeople have due to their long tenure in the industry.
This year, these educational offerings will continue, and the listing of those scheduled thus far for 2008 can be found on our website. If you or any of your associates want to take part in these training sessions, let Glynnis Judy (glynnis.judy@newsouthsupply.com) know. She will contact you with information on how to log on via the web and participate in any, or all, of the training sessions.
In addition to continuing our emphasis on education in 2008, we have also launched some new initiatives to improve our service even more. One initiative is brief quarterly surveys via the web so you can let us know how we are doing. The first survey was e-mailed out approximately two weeks ago, and we are very pleased with the results of the survey thus far. However, we will not rest on our laurels. Our goal will be to increase your satisfaction level with us each and every quarter. If you haven’t completed the survey yet and want to, click here.
Another initiative is electronic forms on our website so you can let us know of any “Service Heroes” in our organization that you believe have exceeded your expectations for first-class customer service. Anytime a New South associate clearly exceeds your expectations, I would appreciate it if you would take a minute to go to our website and fill in the form nominating the person who gave you great service as a “Service Hero.” Each month, the most deserving “Service Heroes” will receive a cash award. On the other hand, and I hope this never happens, if we should fail to meet your expectations, there is a form on our website so you can let me know the specifics of the situation. I guarantee you will receive a response within two business days to each and every incident reported to me. Click here to go to these forms.
We know that having quality products at a competitive price is not enough these days. We are aware that we can seriously jeopardize the profitability of a job if we don’t deliver on time, deliver the wrong materials, don’t deliver enough materials, etc. If we ever fail to meet your expectations, I would consider it a personal favor if you would let me know about it.
I also wanted to take this opportunity to let you know that the latest edition of our product catalog is now available. It’s available either in a traditional printed format, on a CD, or on our website at any time. You can even download this catalog to your PC from our website, if you wish. However, I must warn you that it is a 16 MB file, and even with a high-speed connection it may take you 30 minutes or more to download the catalog. If you want a paper or CD catalog, contact your sales representative or e-mail Glynnis Judy, and we will promptly ship you the catalog in whichever format you request.
Despite the economy, several suppliers have raised prices or are preparing to raise prices in the near future. For more information on the pricing outlook as we see it, please read below.
Since our January newsletter, prices for practically all steel construction products continue to spiral upward with virtually no end in sight. Since the first of December, the world wide price of scrap steel has increased over $100/ton. With scrap steel in high demand in China and other Asian countries, the price for scrap steel is expected to continue to climb though this spring and perhaps into the summer months. With their costs for manufacturing and transportation continuing to rise, along with record prices for scrap steel, domestic and foreign manufacturers of steel construction products have been forced to pass on these increased costs to their distributors.
As reported in last month’s newsletter, Nucor, as well as all other domestic rebar manufacturers, increased their base price by $40/ton in mid-January due to their increased cost for scrap steel. Nucor also announced an increase of another $60/ton effective February 1, 2008. Another factor driving these increases is demand from foreign countries. There is practically no import rebar available on the east coast or the southeastern United States. Many domestic manufacturers are now exporting more rebar than usual, as the market price in many foreign countries has become more attractive than domestic prices. Due to the weak availability of imported rebar and because domestic manufacturers are exporting more rebar than usual, availability is now a concern. With the current high foreign demand and limited import availability, some rebar manufacturers have placed their distributors on allocation (70% of their February 2006 purchases) for February and may also allocate their production in March. With limited availability over the next few months and further price increases expected, if you have upcoming projects requiring rebar, we recommend you buy out these projects now.
All major manufacturers of masonry reinforcing and masonry ties increased prices in mid-January as reported in last month’s newsletter by approximately 10%. Due to yet another increase by wire rod manufacturers, masonry reinforcing manufacturers have already announced they will increase prices again effective February 1st between 10 and 20%. Also, domestic wire rod manufacturers have already announced they will increase prices again in February and probably in March. Masonry reinforcing manufacturers will be forced to increase prices again in March and probably in April. As with rebar, if you have upcoming projects that require masonry reinforcing, we advise you purchase now before further increases take effect.
Wire mesh reinforcing manufacturers increased prices February 1st by approximately 7% and have already advised distributors they will increase prices again March 1st, due to their increased cost for wire rod. The March increase is expected to be 10% or more. They have also notified distributors to expect more increases through spring and possibly into the summer. Please keep this in mind as you are bidding projects.
Manufacturers of most plastic construction materials, such as PVC waterstops, control joints, and expansion joints increased prices either in January or February from 5 to 10%. These increases were due to increased cost for resins and transportation.
Polyethylene manufacturers increased prices again in January by another 4% as polyethylene resin manufacturers increased prices again in January. The resin increase and higher transportation costs forced manufacturers to increase prices despite weak domestic demand. Most polyethylene manufacturers expect another resin increase in February, which will result in polyethylene prices increasing by another 3 to 5%.
Manufacturers of concrete expansion joints increased prices the first of February by 10%, due to their increased costs for solvents and transportation. Most expect their solvent costs to increase again in the late spring or early summer, so expect another increase in early summer.
Copper and stainless steel thru wall flashing prices held steady in January and appear to have stabilized. Despite increased transportation and manufacturing costs, thru wall flashing manufacturers have been able to hold the line on prices due to their decreased cost for copper and stainless steel. If the market for copper and stainless steel moves upward, expect prices for thru wall flashings to increase accordingly.
For more information on the Producer Price Index for construction materials click these links:
PPI Tables, The Data Digest,
PPI - CPI Slides (Powerpoint Presentation).
This month, we are spotlighting the following suppliers:
- BoMetals is one of the industry’s top suppliers of Keyway, concrete accessories, and concrete water stops. For the latest information on their product line, please see their ad below.
- Engineered Plastics Inc. EPI is the manufacturer of the industry’s leading detectable warning device, Armor Tile. Armor Tile is the undisputed leader in detectable warning systems (truncated domes), and they have the widest variety and best quality of any manufacturer in the business. Below is more information about their product line.
- Sandell Construction Solutions is one of the most diverse manufacturers with whom we deal. They are industry leaders in flashing, concrete and masonry accessories, control and expansion joint products, and other related products. They also recently acquired Diedrich Technologies, a leading supplier of concrete and masonry cleaners for the restoration and maintenance of both new and old buildings. For more information on their product line, please take a look at their ad in this newsletter, or contact your nearest New South branch.
This month’s management article is entitled “Negotiate to Win.” Most construction industry vets are already experts at negotiating, but you can always benefit from a new tip or two. I got a couple of new tips from this article, and I hope you will as well.
Lastly, as mentioned a few months ago, we were named one of the best places to work in SC. If you want to see the story on us in SCBIZ magazine, click here.
In closing, as 2008 begins, I wanted to thank you for your business in 2007 and recommit ourselves to exceeding your expectations in 2008.
Sincerely,
Jim
Jim Sobeck
President
(864) 325-6518
jim.sobeck@newsouthsupply.com
