Dear Friends:

As I write this letter three quarters of the way through the month of April, the commercial construction economy is still in the doldrums and the residential construction industry remains in intensive care. Last week single-family housing starts through March were announced to be running at an annualized rate of 510,000 a far cry from over 2 million annualized starts about three years ago. Fortunately our business is mainly geared towards commercial construction so we’re not impacted anywhere near the way lumberyards have been. One lumber trade magazine published a list last week of 380 lumberyard closings around the US since the housing slump began. Several multigenerational companies have closed their doors and a lot more are on the ropes. Some of the biggest lumberyard chains in the country are for sale but there are no takers so they may be shutting down.

Again, we’re happy that we have chosen to focus mainly on the commercial side of the business which, while off, isn’t off anywhere near the degree the residential construction market is. As I mentioned last month, there are some positive areas in the commercial construction arena at this time. The two biggest that we have found are school construction and military jobs. While a few school jobs have been delayed due to lower-than-expected tax receipts that are still a lot of new school jobs starting and Congress appropriated many billions of dollars last year for military base construction and it’s going full bore. We’re finding there are jobs out there besides school jobs and military base construction but you really have to look hard to find these jobs and you have to work even harder to get the order as there are many suppliers competing for slices of a smaller pie.

The downturn in the economy is still causing the prices of many commodity products to decline but some products have had price increases and some, such as copper, have had significant price increases. See below for more specific information about the commodity items we sell.

Although prices for many construction materials have declined over the past several months, there are signs that we may have reached the bottom, as costs for commodities, such as scrap steel, copper, and stainless steel have begun to firm up or increase in some instances. Also, with crude oil prices continuing to inch upward, the cost to transport materials has begun to climb, which may result in higher prices on many items in the coming months.

Raw copper prices have increased by some 50% since January and stainless steel by 20%, due mostly to increased world wide demand. Most manufacturers of copper and stainless steel thru-wall flashings had slashed their inventories the first quarter of this year due to weak demand. Many manufacturers of thru-wall flashings are now faced with replenishing their inventories of copper and stainless steel in May at higher costs than their current stock. Prices for copper and stainless steel flashings are expected to remain at current levels through May, however; unless the prices for raw copper and stainless steel declines soon, expect prices for thru-wall flashings made from these two alloys to increase in June.

As reported in last month’s newsletter, Nucor, as well as other domestic rebar mills, reduced their prices in March by $1.25/cwt. Nucor and Gerdau Ameristeel announced the first week in April that they would hold the same prices as in March for their April rollings. Although scrap steel prices declined in late February and early March, they have begun to move upward in the past few weeks. Many industry analysts expect scrap steel to hold at current levels or rise somewhat more over the next few weeks. As prices for scrap steel have firmed up, expect rebar prices to remain at their current levels for May.

Masonry reinforcing prices for April continued to hold at the same levels as they have for the past few months. With their cost for wire rod expected to stay the same for the next month or two, masonry reinforcing manufacturers report that prices should remain steady for May and June orders.

Concrete reinforcing mesh prices fell slightly in late March and early April, due to weak domestic demand. As wire rod prices have firmed up over the past few weeks, most industry experts believe that concrete reinforcing mesh prices have bottomed out and prices will hold at current levels through May.

Although polyethylene resin manufacturers increased prices in February and March, they reduced prices for April by approximately $.07/lb, as demand remained weak. Because of the resin price decrease in April the anticipated increase for polyethylene film did not occur and prices are expected to hold steady into May. Many industry analysts expect resin manufacturers to try and increase prices in May or June, due to the rising prices for petroleum and natural gas. If resin prices do increase in May or June, prices for polyethylene film will probably increase in June or July.

Also, the latest PPI charts and tables were just released. To view the chart click here and to view the table click here.

This month we're featuring the following suppliers:

As part of our efforts to find a way to increase sales in a down economy we have taken on a new group of products that, while new to us, are closely related to other products we sell. We are proud to announce that we are now distributing the Tremron line of pavers and retaining wall blocks. Tremron is one of the largest and most modern manufacturers of pavers and retaining wall blocks in the industry and they have the widest array of colors as well as the most vibrant colors in the industry. This product line has already begun to take off for us. To learn more about Tremron please see their ad below.
BoMetals is one of the top suppliers of metal keyway, PVC waterstops, masonry control joints, and other concrete and masonry accessories in the industry. They have a wide range of products available, and all of them are available at your nearest New South branch.
Another new product line for us is Diedrich Technologies. They are a long-established producer of masonry and concrete cleaners. They have recently been acquired by Sandell Manufacturing, another long-time vendor of ours, and Sandell has revitalized this company. The next time you need any masonry or concrete cleaners please ask us for a price.

This month’s management article is entitled “Preventing survivor sickness after a layoff”. Given the rash of layoffs lately I thought this article would be both timely and helpful.

In closing, as always, thank you for your business and don’t hesitate to let me know your comments and suggestions.

Best Regards,

Jim

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

Preventing survivor sickness after a layoff

by Joanne G. Sujansky

The current round of corporate and organizational layoffs has offered a myriad of challenges to both management and their remaining employees. This is true for any company, where quality and employee performance can make or break an organization.

Those who remain in an organization after downsizing have been recently coined "survivors" - and how they feel has been described as "survivor sickness."

The empty workstations speak volumes about a massive and uninvited change that has affected their organization. Unfortunately, it can also affect their work performance. There is a shift between the perceived contract of workplace trust between employee and management, with remaining employees having negative feelings such as fear, anger, depression and denial. Add to this an increased workload on already busy employees, and you may well be facing lowered productivity and retention problems.

Everyone knows that the best medicine is often preventative, and this is also true with "survivor sickness." A plan to help your remaining employees thrive in a new environment is an important part of any downsizing and should be developed before the first person is let go.

Any post-downsizing plan should follow what I call the "ABCs of Change."

Acknowledge that your employees are upset and allow them to express their feelings.It is often a good idea to bring in outside counseling to help the process along.

Begin anew, re-establish your vision and give people a reason for continuing to move the organization forward. This includes reminding employees of both long- and short-term goals while continuing to encourage them.

Construct and communicate your plan for change. Organize a planning team consisting of management and employees to anticipate and deal with problems. Once this is in place, make sure you communicate the plan so that responsibilities are clear and there are no misunderstandings.

Along with constructing and implementing an effective plan, you should spend time coaching. During downsizing, this style of managing is best, as it both plays to your employees' strengths and more effectively corrects their weaknesses.

Best coaching practices include:

• Involving employees - Actively solicit ideas from employees and also keep in mind that your employees may be aware of potential problems existing under management's radar.
• Providing feedback - Acknowledge achievement (catch your employees doing something right) and also offer constructive criticism that helps employees understand how they can improve.
• Offering training - Employees appreciate any workplace training they can receive. It not only builds their skills, but it also helps to keep them on the job. Offer a variety of development opportunities, including online, classroom and on-the-job.

Also, despite the tight job market, you still need to be concerned about retention.

You can't afford to lose good people when your present staff is already stretched to its limits. Burnout and fear of being a victim in another round of layoffs may cause your staff to consider leaving before things get beyond what they can tolerate. However, following the ABCs of change and coaching your employees will keep your workplace superstars in the organization.

In addition, never lose sight of the fact that the little things matter. Keep upbeat around your employees, continue events such as picnics and holiday parties, recognize and reward accomplishments - their benefits far outweigh their costs. Small investments in your employees go a long way as opposed to the heavy expenses incurred by turnover.

It is very important that your organization develops and implements a plan to help your survivors; you need everyone to be at peak performance. Taking these steps will ensure your survivors have the resiliency to bounce back and thrive in a new environment.