New South Construction Supply eNews - November 2007

Dear Friends:

Since last month’s newsletter, the residential construction industry has taken even more hits, several Wall Street CEO’s have been fired for placing bad bets on sub prime mortgages, and some of the bad news from the residential sector has negatively impacted commercial construction as well, as lenders have tightened lending standards for all types of construction. A lot has changed in construction forecasts because of this (mainly negative) so to read the latest prognostications click on the following links: November PPI slides, November PPI Tables, Strong Nonresidential Markets Can't Stop the Housing Crisis Crunch Article

As the year is winding down, we are starting to see inflation come back into the construction materials market, especially for steel products and anything made from petroleum or petroleum byproducts such as polyethylene and extruded polystyrene insulation. Read below for more specific information.

Most manufacturers of construction products have resisted pressures to increase prices over the past several months, although their costs continue to rise. Increases in raw materials and transportation costs have risen drastically over the past quarter. (We all know what a gallon of gas costs now compared to just a few weeks ago.) Although demand for most construction related products is relatively weak, due to the slump in residential construction, most manufacturers can no longer absorb their higher costs and many have either increased prices recently, or have announced increases which will take effect in the next few weeks.

As announced in last month’s newsletter, manufacturers of welded wire mesh increased prices at the end of October by approximately 8% and industry sources expect another increase to take effect sometime in December. Thursday, November 8th, Nucor, which owns several wire mesh manufacturing plants in the Northeast and Mid-Atlantic region, announced a 10% price increase effective immediately. No prior notice was given to their distributors and no job protection was offered. Other domestic manufacturers followed Nucor’s lead and announced an immediate price increase effective Friday, November 16th. This unexpected increase was due to another increase in the cost of wire rod by domestic manufacturers. With little or no imported wire rod available, wire mesh prices may increase again in the near future.

With the US currency being weak vs. most foreign currencies, and with the high demand from China due to their current building boom, the price for imported rebar has not been attractive to domestic brokers over the past several months. Because of these factors, little or no imported rebar is “on the water” headed to the US and the availability of imported rebar is extremely low. With the recent rise in scrap steel prices, many experts expect Nucor, as well as most other domestic manufacturers of rebar, to announce an increase of $15.00 to $30.00/ton in December, which would take effect in January. If you have projects which require rebar beginning the first part of 2008, you should consider purchasing in the next few weeks to avoid the expected increase.

Polyethylene manufacturers increased prices twice in the past few weeks. These two increases resulted in a net increase of 10% for the cost of polyethylene. These increases were due to increased cost for polyethylene resin. With the price of oil at or near record highs, it is expected that resin prices will continue to rise and another industry-wide increase of 3% to 5% will go into effect by the first part of December. As with rebar, you should consider purchasing now if you have any upcoming projects which require polyethylene.

Raven Industries, one of the top manufacturers of under slab vapor barriers has indicated they will increase prices on their Vapor Block line by 3% to 5% in December. This increase is necessary due to their increased cost for resin. It’s expected that other vapor barrier manufacturers will increase prices in December also.

BASF has announced their Construction Chemical Division will increase prices 3% to 8% effective January 1st. We have not been notified of the exact amount of the increase for each product line, Sonneborn, Hydrozo, Master Builders, Thoro, etc., but it’s expected most items will increase more than 5%. Traditionally, most construction chemical manufacturers increase prices in January each year, so please keep this in mind as you are preparing your bids for 2008.

The world-wide price for copper has risen again over the past few weeks. The price moved up by $.50/lb the week of November 11th. It appears that copper will continue to rise over the next few weeks, so expect copper thru wall flashings to rise in January by around 10% or more. Most manufactures have adequate stock of copper to supply projects at current prices through the end of 2007, but will be forced to increase prices due to their increased cost for copper. Unless the price of copper decreases, expect further increases in products made of copper in the first quarter of 2008.

As with welded wire mesh manufacturers, masonry reinforcing manufacturers have been hit hard by the recent increases in their cost for wire rod. Masonry reinforcing manufacturers have not increased prices in recent months due to weak demand in certain areas of the US. With the cost of wire rod and galvanization continuing to increase, it’s expected that most manufacturers will announce an increase of approximately 10% sometime in December that will take effect in January.

As it appears that prices for masonry reinforcing and copper thru wall flashing will increase in early 2008, it may be wise to buyout any upcoming masonry projects prior to January.

I also wanted to take this opportunity to let you know about our holiday schedule. We will be closed on Thanksgiving and the day after Thanksgiving. We will also be closed on Christmas Eve and Christmas Day, as well as New Year’s Eve and New Year’s Day. We sent out an e-mail survey to those of you whose e-mail addresses we have, and the vast majority of you said that there was no need for us to be open on New Year’s Eve, and every single customer responding to the survey said that you were not planning on working on Christmas Eve either. However, if you need materials on any of the days we are closed, please contact your sales representative, and we will make arrangements to get you materials.

If you’re going to the World of Concrete show in January, you can register for free by going to http://registration.expoexchange.com/showWOC081/default.aspx?SourceCode=A36. This can save you up to $65 per attendee versus onsite registration.

This month we are profiling the following suppliers:

    • Sonoco Products is one of the world’s largest packaging companies and is always the leader in innovation. Their new Sonotubes with Rain Guard technology allows you to let Sonotubes get wet on a job site without ruining them like old technology. They also have square column forms available that are much less expensive than forming a square column by hand. For more information about their newest products, please see below.
    • Universal Building Products is one of the market leaders in concrete forming products and related accessories. They have a large product line available for purchase or rent. To get the latest information about their offerings, see their ad below.
    • CIM is one of the largest producers of water containment products used to line fountains, water tanks, and a variety of other uses. The product is easy to apply and works well, so if you have a need for this type of product on an upcoming job, please call your nearest New South branch.

This month’s management article is entitled “Why Bad Management is Really Expensive.” Most times, the difference between good companies and great companies is management. This article gives some insight into why bad management is something you cannot afford, and how to avoid it.

In closing, on behalf of all of the associates at New South Construction Supply, I would like to wish all of you a happy Thanksgiving. We are very thankful for our relationships with you and hope that we show we are grateful for your business throughout the year, not just on Thanksgiving.

Have a great holiday, and, as always, let me know of any problems or how we can serve you better.

Sincerely,

Jim Sobeck
President
(864) 325-6518
jim.sobeck@newsouthsupply.com

This month we are featuring the following suppliers:

 

End column finishing forever with Sonotube® Finish Free® concrete forms

Sonotube® Finish Free® forms eliminate costly column grinding, patching and manual finishing.


Check www.sonotube.com for more information.

 


Uni-Ply Handset Panel System

Provides for quick assembly and is lightweight and easy to maintain throughout multiple uses

• Exact corner joints eliminate tolerance build-up over large areas
• Standard 100/30 ½” HDO plywood is riveted to angle struts
• Plywood tolerance is closely maintained to assure long form life.
• Angle struts are spaced on 12” centers to provide strength, uniform concrete and minimize deflection
• Handles are provided on panels for easy handling in setting and stripping forms
• Optional Xact2form® upgrade to 220/220 Overlay enables hundreds of re-uses with 100% Birch plywood panels (shown in picture)

Universal Building Products, Inc. delivers a complete assortment of premium concrete accessories to residential and commercial projects throughout the country. UBP is your single source for all concrete construction needs including, forming systems, chemicals, tilt-up and pre-cast lifting systems, hardware, inserts and anchors.


 

For over 30 years C.I.M. Industries Inc. has been keeping liquids where they belong with a product line that delivers long-term solutions to virtually every containment and waterproofing need. CIM’s two component urethane products bond aggressively to a wide variety of substrates including asphalt, concrete, steel and wood. CIM is applied by spray, squeegee or roller, curing quickly to form a resilient flexible coating that is UV stable, voc compliant, ANSI/NSF61 approved for potable water contact, and designed for constant immersion in aqueous solutions.

Our new CIM 2000 material is 100% solids containing no voc’s and has recently passed ASTM E108/UL 790 spread of flame testing and ANSI/NSF 61 Potable Water Testing. CIM 2000 like the rest of the product line is designed for constant immersion applications and exhibits excellent chemical resistance to acids and bases.

CIM materials have been successfully used for coating and lining applications for many markets, including, water and wastewater facilities, primary and secondary chemical containment, waterproofing, pond and fountains, and cooling tower restoration.

For more information, contact any New South Construction Supply branch or visit the CIM website at www.cimindustries.com to view their entire product line ranging from their CIM 1000 asphalt modified urethane to their new 100% solids CIM 2000 urethane materials.

 


Why bad management is (really) expensive and good management (really) makes money
by Judith Bardwick

How people feel about their jobs and their company does matter – to the bottom line. Here is a small sampling of the significant data affirming the link between feelings and financial results:

The one-third of employees who are alienated from their companies will actively seek a new job within two years, and 50 percent will find a new employer within five. Companies with high turnover pay a high price. Replacing critical clerical and front-line customer service workers costs about 50 percent of their annual pay. The figure for executives soars to 200 percent of their base salary.

Gallup, the world’s leader in opinion polls, has done extensive studies of employee engagement, drawing on a database of 4.5 million workers in 12 industries. Among its findings: an astonishing 80 percent of employees do not care about their employer. In the majority of organizations, about 60 percent of employees work only enough to keep their jobs and another 20 percent would hurt the organization if they could.

In a study of over 1,000 companies with 500 or more employees, the international consulting group Towers Perrin documented a “statistically significant correlation” between how employees felt about work and shareholder return over a five-year span. The more positively employees felt, the higher the companies’ profits and share price.

To quantify the relationship between how an organization relates to its people and how those practices relate to financial results, the global consulting firm Watson Wyatt created the Human Capital Index (HCI). The firm devoted two years to administering HCI surveys to 51 organizations in the United States and Europe, and then compared the results with each participant’s five-year total returns to shareholders. Organizations with low HCI scores averaged a 21 percent total return while those with high HCI scores averaged an impressive 64 percent return.

Vanderbilt University and Hewitt Associates, human resource consultants, studied the financial performances of Fortune’s “100 Best Companies to Work For” from 1998 to 2003. The companies recognized for their investment in people dramatically outperformed their industry competitors, with cumulative stock returns averaging 50 percent above the market norm. The trend continues. The publicly traded companies on Fortune’s 2007 list of “100 Best Companies to Work For” consistently beat the market over the preceding 10 years.

Nurturing employee commitment and engagement

Commitment is what makes people say, “I’m proud to be working here; it’s exactly where I belong.” Engagement is what makes them say, “What we do matters. Let’s go!” Just imagine what your organization could accomplish if all employees had that attitude. Here’s a proven three-part strategy to help you lead your people to that level of passionate involvement:

1) Ask the right questions
Ask your front-line workers, support staffers, managers and yourself these questions:

What do we do as an organization that is a real source of pride for us?
What happens to our people and our customers because of what we do?
In what ways are we improving people’s lives?
What are our key values?
Do we make sure that our leaders exemplify what we say we stand for?
Do we “walk the talk” and act in line with our values and mission?

Then, pay close attention to the answers. Every resounding “yes” must be visible throughout the organization, and every “no” calls for major change.

2) Hire the right people
Experts have identified six personal qualities shared by people who are likely to become engaged employees. Take advantage of standard personality tests (most HR departments have them) to determine whether job applicants have the characteristics and outlook to contribute to, and fit in with, a culture of commitment and engagement. Highly engaged employees demonstrate:

• Emotional maturity
• Positive disposition
• Adaptability
• Self-efficacy
• Passion for work
• Achievement orientation

3) Measure the right attributes
Discerning what people feel provides much more valuable information about the organization than learning what they think. To gauge their emotional temperatures, regularly ask employees open-ended questions. For instance, “How would you describe your relationship with your boss?” Forget morale and satisfaction surveys. These widely used assessments of a manager’s performance reveal little of substance and reinforce a sense of entitlement in employees.

Adapted from ONE FOOT OUT THE DOOR: How to Combat the Psychological Recession That’s Alienating Employees and Hurting American Business by Judith M. Bardwick, Ph.D. (Published by AMACOM Books; October 2007; $24.95 Hardcover; ISBN: 978-0-8144-8058-8).





New South Construction Supply Locations

 

Main Office
Shipping:
951 Harbor Road
West Columbia, SC 29169

Mail:
PO Box 512
Columbia, SC 29202

Phone: (803) 791-8700
WATS:(800) 849-6768
Fax: (803) 796-0713

Concrete/Masonry Products Sales
Phone: (803) 791-8700
Accounting Dept. (803) 791-8724
WATS: (800) 849-6768
Main Fax: (803) 791-8191
President- Jim Sobeck (864) 325-6518
EVP/CFO- Kurt Herwald (864) 268-3970

VP Purchasing- David Hodgin
(704)-358-9797
Director of Finance and Operations- Dave Lewis
Operations Manager- Donald Whately
Sales Manager- Jon Black



Other Locations

9 N. Kings Rd
Greenville, SC 29605
Phone: (864) 269-7007
WATS: (800) 849-4454
Fax: (864) 269-6004
Operations Manager- Rob Hovanec
Sales Managers- Russ Lott & Jey Yates

1427 Mechanical Blvd.
Garner, NC (Raleigh) 27529
Phone: (919) 662-9012
WATS: (800) 849-4677
Fax: (919) 662-9412
Operations Manager- Vic Murray
Sales Manager- Bud Driggers

 

Other Locations

4987 Banco Road
N. Charleston SC 29418
Phone: (843)760-0780
WATS: (888)224-3140
Fax: (843) 760-6127
Operations Manager- David Starr
Sales Manager- Trip Moore

9050 D W. Market St.
Colfax (Greensboro) NC 27235
Phone: (336) 992-0237
WATS: (800) 609-0889
Fax: (336) 992-0839
Operations Manager- David Perkins
Sales Managers- Kearns Cheek and Anthony Bunting

180 Rodeo Drive
Myrtle Beach SC 29579
Phone: (843) 236-6447
WATS: (800) 821-2676
Fax: (843) 236-6521
Operations Manger- George Acerbi
Sales Manager- Clint Paul

649-51 Anderson St.
Charlotte NC 28205
Phone: (704) 358-9797
WATS: (866) 375-9660
Fax: (704) 358-9646
Operations Manager: David Hodgin
Sales Managers: Jim Harris, Walt Bell, and Chris Daleus

358 Industrial Park Rd
Hardeeville (Hilton Head) SC 29927
Phone: (843) 784-1580
WATS: (866) 326-8802
Fax: (843) 784-1581
Acting Operations Manager- Dave Davis
Sales Managers- Steve Melton and Ray Bryant

17251 Highway 53
Gulfport MS 39503
Phone: (228) 539-2519
WATS: (866) 506-7257
Fax: (228) 539-2771
Operations Manager- John Jalanivich
Sales Manager- Blake Boone