Dear Friends:

As August winds down there is further evidence that the residential construction market is on the upswing after almost three years worse than anything seen before since housing starts have been recorded. That's the good news. The bad news is, as residential housing is headed up, commercial construction is continuing to plunge. There is very little new private commercial construction as lenders are very reluctant to fund private projects and developers are wary of starting any new commercial projects at this time. Fortunately, there is still quite a bit of school and government work, especially at the military bases in the South. Were seeing as many as 35 bidders on school job these days when, in the past, there might only have been 3-5 bidders on school job. This illustrates just how badly commercial contractors need work. The government is saying that the recession is over and many banks are posting record profits, so, hopefully commercial construction may pick up early next year. At least that's what I'm hoping for.

The current economic climate wasn't conducive for many suppliers to get the price increases they were trying for in the last month. Some gave up on getting a price increase and others settled for only part of the increase they hoped to get.

For more specific information on price trends in our market please see below.

For the past several months some manufacturers have increased, or attempted to increase, prices for the construction products they manufacture. Manufacturers' costs for scrap steel, metal alloys, and resins made from petroleum and with natural gas, have increased substantially over the past several months and costs are still trending upward, although the rate of increase has decreased recently. Despite these increased costs, demand has been such that many price increases have not held in full and some manufacturers rescinded their price increases slated for August.

Nucor and Gerdau Ameristeel, as well as other domestic rebar manufacturers announced that prices for September rollings would remain the same as their August prices, although scrap steel costs continued to move upward in August. Demand still remains weak and with the $40.00/ton August increase, domestic mills decided the market would not support another increase in September. Even though domestic mills decided to hold the line on prices for September, many industry analyst speculate that if scrap steel prices continue to move upward the rebar industry will raise prices for October rollings.

Copper and Stainless Steel thru-wall flashing prices held steady in August, after the industry-wide July price increase. The price for both raw copper and stainless steel are currently at their highest levels this year, due to increased world wide demand (raw copper is up nearly 90% since January 1st and stainless steel is up over 50%). Because of their increased costs for raw copper and stainless steel, thru-wall flashing manufacturers have indicated that they will increase prices between 5 and 8% in September. If you have upcoming projects which require either of these items, we recommend you consider buying out these projects now to avoid the September price increase.

Although concrete reinforcing wire mesh manufacturers attempted to increase prices on August 1st, some manufacturers rescinded their increase and prices industry wide did not rise in August. With their costs for wire rod having increased by $60.00/ton since May, domestic wire mesh manufacturers have announced they will increase prices by approximately 9% on September 1st. Unlike when the industry tried for an increase in August, the September increase is expected to hold.

Masonry reinforcing manufacturers elected not to increase prices in August, as they had indicated they would do in July. As with the rebar mills, manufacturers felt that the market would not support two price increases in as many months and decided to postpone their price increases until mid-September. As the announced price increase will be approximately 10%, consider ordering any masonry reinforcing you may require for your projects as soon as possible.

Polyethylene film manufacturers did raise prices in July, but prices feel back to June levels as demand remained weak. Polyethylene resins are increasing again September 1st, by $.04/lb, so although the July price increase did not "stick", manufacturers will increase prices in September. The September increase will be in the 8 to 10% range, as resin prices will have increased buy $.15 per lb since May.

This month we're profiling the following suppliers:

Wire-Bond is one of the oldest and most innovative manufacturers of all sorts of masonry reinforcement products. They are constantly innovating and coming up with new ways to save you time and money on your masonry jobs. Please check out their ad below. All of their products are available from any of our branches.
Pecora is one of the oldest manufacturers of caulking and sealants in the U.S. They have fiercely loyal customers because of the quality of their products and their service. To get a price on any Pecora products, just contact your nearest New South branch.
Armor Tile is a product manufactured by Engineered Plastics, Inc. The ADA requires the use of tactile warning devices at all new or redone intersections and at the curb level of many retail stores and public facilities. Armor Tile is the top product available to the construction industry. While there are cheaper products that fall apart in a number of years, nothing else on the market compares to Armor Tile. The next time you need a tactile warning system, please let us give you a price.

This month's management article is entitled "Is a culture of entitlement killing your company?" Entitlements are easy to add and almost impossible to take away. I hope this story will be helpful to you as you deal with this touchy subject in your company.

Until next month, keep hanging in there and remember the famous quote from the German philosopher Nietzsche, "That which does not kill me makes me stronger!" I don't know that I need to get any stronger!

Thank you for your business. We never take it for granted.

Best Regards,

Jim

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

Is a culture of entitlement killing your company?

by Dave Anderson

Does your workplace reflect a culture of entitlement or a culture of merit? The answer to this question is vital to your organization's success.

For decades, business has allowed society's "all are equal" and "subsidize those who can't make it on their own" entitlement models to encroach on the culture of merit needed to optimize performance within an enterprise. Entitlement as described by Judith Bardwick in her book, Danger In The Comfort Zone, is an attitude where people believe they do not have to earn what they get. They believe they deserve what they get because they are owed it and because of who they are - not because of what they do.

In this culture people take for granted what they have and keep asking for more. What's done for them is never enough. They focus more on what they are owed than what they owe. In a culture of entitlement, peer pressure to perform is supplanted by peer pressure to conform; looking good is more important than doing well.

While society has moved increasingly toward entitlement over the years, corporate America is not blameless. In fact, the culture of entitlement in business hit full stride in the years following World War II when there were too few workers to fill jobs in a booming economy. Because of this shortage, it was nearly impossible to get fired and droves of people doing mediocre work were rewarded with promises of lifetime job security. When managers no longer required results and wealthy corporations stopped demanding performance as a condition for keeping a job or getting a raise, the culture of entitlement spread like a plague.

Here is an eight-point checklist to determine if you have a culture of entitlement in your workplace:

Promotions are given and people remain in jobs based on tenure, not because they are best for the job.

Christmas bonuses are given because it is Christmas time, not because people earned them.

End-of-the-year raises are dished out because it's the end of the year, not because people went the second mile.

Countless dollars are dumped into monthly incentive programs and contests that enrich everyone without regard to whether they deserve to participate based on past performance.

Managers hold politically correct employee reviews and evaluations rather than tell people they are failing.

Managers set no-brainer performance standards designed to make people feel comfortable rather than stretch them with a higher bar.

Managers spend equal amounts of time, energy and resources on employees instead of pouring more into the top performers who have earned it.

Managers would rather be well liked and popular than confront poor performance and hold others accountable for results.

To create a culture of merit in your workplace it's imperative that society's politically correct tendencies not be allowed to seep into your business psyche. For example, society's entitlement model says: weaken the strong to strengthen the weak. This is evinced in tax rates that increase as you earn more and in the public schools where teachers are admonished to spend more time with the weak students to get them up to speed.

Society's entitlement model says everyone should be given the same opportunities and have equal access to resources. Society's entitlement model says that if you can't make it on your own, government programs will subsidize tough times and if you can't afford a lawyer, one will be provided. This is not to condemn or judge the worth of society's model, but to point out how its values influence business thinking. What we read in the paper and hear on television takes root in our business psyche, diluting and perverting the performance-based philosophy required to create a culture of merit in an enterprise.

The culture of merit needed in the workplace conflicts with many of society's entitlement models. Here are seven:

A merit culture mandates that the strongest people in your workplace must be fully supported and leveraged and the weak links weeded out.

A culture of merit distributes recognition, rewards and opportunities based on what people earn and deserve, not equally to all.

A culture of merit holds people accountable and says that if you can't meet performance standards, you lose your job, because in a merit culture leaders are not afraid to terminate those who don't cut it.

A culture of merit doesn't allow tenure, experience or credentials to substitute for results.

A culture of merit doesn't blindly accept or tolerate employees because of who they are, but creates an environment hostile to mediocrity that instills positive peer pressure to perform.

People in a merit culture feel anxiety to get results. While too much anxiety and pressure is detrimental to performance, so is too little, thus in a culture of merit an optimal level is attained and maintained. In a merit culture people want to be held accountable. Living in a gray area de-motivates them. This culture welcomes the championing of heroes and the punishment of slackers.

In a culture of merit, 'firing' is not a bad word and everyone understands when an employee is forced to leave the company it is not for personal reasons or to explore other options; it's because they didn't get the job done.

To create a culture of merit, run your business more like a team than like a family. While having one big family sounds warm and fuzzy, as with society's entitlement model, there are serious flaws with a family model when compared to a culture of merit needed in business.

Family models are too tolerant and accepting to work well in business. In a family, no one is judged, but is accepted strictly because they belong, not because they perform. Family models are too generous, too forgiving and too tolerant to serve well in a culture of merit. No one can be fired from a family. Membership in a family is the epitome of entitlement; it is assumed and not earned.

On the other hand, people on a team must earn their way and are judged and rewarded based on their contribution. There is pressure to perform. Team members are held accountable for results, not best efforts. Non-performers find themselves off the team.

Moving from a culture of entitlement to a culture of merit takes time and courage. Entitled people resist stretching and accountability. During the transition from entitlement to merit-based performance, the morale of entitled employees will diminish. Thus new expectations must be set, accountability established and pressure to perform sustained long enough to let people know you mean business and the good old days are over.

However, people must also be shown how they can earn their way into merit. They must be given the tools, coaching and support to make the transition, because you can't manage or administer your people from entitlement to merit; you must lead them there.