New South Construction Supply eNews - December 2009

 

Dear Friends:

As I write this letter 2009 is almost over. All I can say is good riddance! I'm glad that we planned on 2009 being a tough year as if we hadn't planned properly we might not still be around. We have had some competitors completely shut down this year and some just closed a few locations. One of our biggest competitors lost $276 million in the third quarter alone.

I'd like to say that I think the worst is over and that we are headed for a recovery in commercial construction and 2010, but I don't think that will be the case. Everything I am reading is saying that we will have a further decline in commercial construction in 2010. As banks aren't lending to private developers, and as I don't see that changing anytime soon, and as most of the federal stimulus money isn't directed towards commercial construction, I don't see any significant recovery in commercial construction until late 2010 or early 2011.

This doesn't mean that there aren't opportunities in construction. There are. Just not in commercial construction. Residential housing continues to recover, a lot of the stimulus money is geared towards road and bridge construction, and there is a fair amount of restoration work going on. If you have relied solely on commercial construction for your livelihood I think you need to broaden your horizons or risk financial ruin.

Despite the current state of the industry quite a few suppliers are planning on price increases in January. I don't think all of the price increases will stick. I think some suppliers will get partial price increases and some will get none. For more specific information please see below.

Despite extremely weak domestic demand, some manufacturers of construction materials, especially those made from steel have announced price increases for January. The Chicago Shredded Scrap price increased to $300.00/ton the first week in December, up $65.00/ton from the last week in November. Low worldwide availability and increased demand, mostly in Asia, is fueling the increased price for scrap steel and many analysts expect scrap prices to continue to rise into next February. Due to their increased costs for scrap steel, most producers have already notified manufacturers and distributors of price increases for January. Also, the prices of other commodities such as petroleum, natural gas, and copper alloy continue to rise, which may result in higher construction materials costs in the next few months for products made using these commodities.

All major rebar mills announced a price increase for their January rollings of $3.25/cwt, which is approximately a 13% increase over their December prices. Nucor, Gerdau Ameristeel, and all other rebar producers cited their increased cost for scrap steel as the reason for the price increase. As scrap prices are expected to continue to rise into January and possibly beyond, rebar prices are expected to increase accordingly. If you have projects which require rebar that will start up between now and spring, you should consider buying out these requirements now to avoid future prices increases.

Masonry reinforcing and anchor manufacturers Wire Bond, Hohmann & Barnard, and Dur-O-Wal have announced that they will increase prices in January between 15 and 20% due to their increased costs for wire rod and plate steel. All three received price increase notices from their suppliers the week of December 7th for January shipments, so they will be increasing their prices to cover their higher costs for wire rod and plate steel. As with rebar, if you have upcoming projects that require masonry reinforcing and anchors, we advise you to buy out these projects as soon as possible.

Although concrete reinforcing wire mesh prices fell slightly in late November and early December, due to weak demand, prices are now firming up, as manufacturers of wire mesh are facing an increase in their wire rod costs for January. Most manufacturers have indicated that they will increase prices in mid to late January or by the first of February at the latest by 8 to 12%. Consider purchasing any requirements you may have for reinforcing mesh now, as all indications are that there will be further increases later in the first quarter of 2010.

You should expect increases for nearly all construction products made from steel in January or February. Prices will increase on structural steel, bar supports, nails, fasteners, snap ties, etc. due to the rising price of scrap steel. Be sure that you factor in higher costs for these and all other steel items when you are preparing your bids.

Polyethylene resin manufacturers announced an increase of $.04/lb for December shipments, as the market price for natural gas continues to rise. Although resin manufacturers attempted to raise prices by $.03/lb in November, only about half of the increase held. It is expected that most of the December increase will stick, as polyethylene film manufacturers purchased relatively little resin in November and most need to replenish their inventories soon. If the December resin increase holds, expect polyethylene film prices to increase by as much as 5% in January.

As reported in last month's newsletter, copper thru wall flashing manufacturers increased prices in December, or will increase prices by January 1st, by approximately 10%. As the worldwide price for copper is now at $3.22/lb (up over $.15/lb since December 2nd) and is expected to increase even more in January, copper flashing manufacturers have indicated that they will increase prices again in February or early March. The percentage of the next increase has not been determined by manufacturers to date, but most expect the increase to be in the 10% range.

Historically, most chemical manufacturers increase prices in January or February each year. As demand for these items remains weak, no major construction chemical manufacturer has announced a price increase for early 2010, which is good news for all of us. Although no increases are planned at this time by chemical manufacturers, many chemicals they produce contain petroleum derivatives. As crude oil prices are on the rise, manufacturers may increase prices in the 2nd or 3rd quarter of 2010, if their costs for petroleum derivatives increase.

To see the latest PPI tables and a slide show on the 2010 construction and materials outlook from the AGC click on the links below.

Click here to view the AGC PPI Information
AGC Construction & Materials Outlook Presentation, December

This month we are profiling the following suppliers:

  • BASF is the world's largest chemical company and has a wide variety of products, under many different brand names, for the construction industry. One of their highest regarded products is called Set 45. To learn more about it, please see below.
  • Dow Chemical is highly regarded for their Styrofoam brand insulation but not as many people are aware of their Thermax insulation. See below for more information on this product and its varied uses.
  • Right Pointe is one of the most diversified manufacturers of concrete chemicals and accessories. Not only do they have a top quality line, but their products are priced right for a tough economy. To see more about some of their products, scroll down.

This month's management story is entitled, "Old Fashioned Virtue". This story talks about how it may be time to get back to old-fashioned virtues if you want to survive this recession. I'm confident you will enjoy this article and learn a lot from it.

I want to remind you again to check out our Twitter feed and to sign up for Twitter so you can follow all of the articles we are posting about trends and projections for the construction industry. To view the feed, go to www.twitter.com/NewSouthSupply.

In closing, I want to wish all of you a happy holiday season surrounded by lots of friends and family and a much more prosperous 2010. When I count my blessings at this time of year I count all of you as well.

Best regards,

Jim

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

Stay up to date on the latest industry news by following us on Twitter.
http://www.twitter.com/NewSouthSupply

This month we are featuring the following suppliers:
Set 45 is a one component magnesium-phosphate based concrete repair and anchoring mortar available in two formulations: Set 45 (ambient temperatures below 85F) and Set 45 HW (85 - 100F). Setting in approximately 15 minutes, Set 45 and takes rubber-tire traffic in 45 minutes reaching 2,000 psi in one hour. Can be applied from 1/2 inch to 2 inches providing superior bonding with virtually no drying shrinkage providing resistance to freeze-thaw cycles and de-icing chemicals. Set 45 is available at all New South branches.

Dow THERMAX polyisocyanurate insulation comes with a foil facer or a white embossed facer for exposed applications. Thermax is the only polyiso that meets FM 4880 for exposed applications for walls and ceilings. This product is ideal for insulating the floors of condos that have parking below the units (see photo below). Thermax is also used for insulating the interior of precast panels in industrial facilities. The embossed finish and closure strips give the product a finished look in these applications.

Contact New South Supply for more information on Thermax insulation from Dow Chemical.




For more information call your local New South branch or visit them at www.rightpointe.com.

December's Management Article

Old-fashioned virtue

Remember hard work? Author Jon Gordon explains how this old-fashioned virtue can lift you out of the recession and propel you to the top.

If you're like most people, you've probably spent the past year fretting: about the economy, the stock market, the job market, the future. Maybe you've spent so much time worrying about what could happen that you've lost sight of the plans you had all along. You know, those dreams about getting ahead and aspiring to bigger and better things. It's easy to get complacent, even in the good times. But when you're paralyzed by fear that it could all be gone tomorrow, the temptation to lie low and not make waves can be almost overwhelming.

Don't succumb, urges bestselling author Jon Gordon. Now is actually the perfect time to get ahead. And the secret to succeeding has little to do with an impressive degree (or pedigree) or with knowing the right people. In fact, it's not a secret at all but something society seems to have almost forgotten about: hard work.

"If you think you're already working hard at your job, think again," says Gordon, author of the new book Training Camp: What the Best Do Better Than Everyone Else (Wiley, 2009, ISBN: 978-0-470-46208-9, $22.95). "You can't expect to show up each day and just do your job and think that's going to cut it. What you have to do is make sure that you are never outworked."

Think about the successful people you know. Celebrities. Politicians. CEOs. Yes, most are talented and special in some way, but when you start to look closer, you may realize they aren't that different from the average person. What sets them apart? Their drive. Take Will Smith, for example: When asked by an interviewer to explain his success, he responded:

"I'm not afraid to die on a treadmill. I will not be outworked. You may be more talented than me. You might be smarter than me. And you may be better looking than me. But if we get on a treadmill together, you are going to get off first or I'm going to die. It's really that simple. I'm not going to be outworked."

True, Will Smith is charismatic, funny, and a great actor, but so are plenty of other people in Hollywood. The secret to his success, according to him, is his work ethic. While working hard may seem like a simple enough idea (and it is!), most people just don't do it.

Now is the time to start, says Gordon. By really pouring on the "elbow grease," you can not only set yourself apart from the less ambitious around you, you can help pull your company's tail out of the fire or maybe even start a thriving business of your own.

Gordon offers a few guidelines for revving your work ethic into overdrive:

Burn the midnight oil. (And that doesn't mean empty "face time.") Nobody expects you to work all the time, and like everyone else, you need the occasional break. But that doesn't mean you should bolt out of the office at 5:00 sharp. These days your willingness to go the extra mile - and the extra hour - won't go unnoticed. With all the budget cuts and layoffs that have happened in the past year, there is more work to be done than there are people to do it. That's your cue to spend a few extra hours each week at the office, or at home in the evenings, striving to get it done.

"If your department is having trouble meeting deadlines, step up and take charge of the time crunch," suggests Gordon. "Come in to the office an hour early a few days a week to get ahead on things like answering e-mails and returning phone calls so you can spend your daytime hours being more productive. If you like to make it home for dinner with your family each evening, spend an hour or two catching up on work at night once the kids are in bed. Your boss will notice, and you will have more time to work toward getting ahead instead of spending daytime hours in a constant game of catch up."

Be willing to bear the load. If there are rumors of layoffs or pay cuts in your office, it can be tempting to do the bare minimum while you bide your time and wait for the ax to fall. But Gordon says that now is the time to step up and take on new projects and extra responsibilities. Volunteer to head up the new client account or to help out with any duties left behind when coworkers are let go. No, helping answer the phones or following up on new business leads weren't in your original job description, but they are tasks that must be done to keep the business running and your paycheck coming.

"If you wait for someone else to step up to the task, then you are being outworked," warns Gordon. "Continually compare yourself with those around you. Are they working harder than you? Have they offered to take on more projects or extra work? If the answer is yes, then you have some reevaluating to do. When it comes time to make decisions about promotions, the people who have taken the initiative and stepped up to help have a much better chance of being considered, and that's precisely where you want to be."

Polish up your marketable skills. Yes, money is tight these days and your time is probably even tighter. And the thought of adding one more thing to your schedule may send your brain into a tailspin. But if there was ever a time to add to your skill set, it's now. Make a list of specialized skills that are important to your line of work and that could give you an advantage, then research continuing education in your area and online for increasing your talents and certifications. It's a great way to increase your worth to your employer and to constantly keep yourself current.

"Continuing your education and adding to your skill set is always important, but now it can mean the difference between the same old job and bigger, better things," says Gordon. "Companies still need the talents and qualifications that employees can provide; but they don't have the funds to hire new people like they used to. If you are already on the payroll and you can work a little harder and offer them those skills, you become an even bigger asset. It's like getting two employees for the price of one."

Be a penny-pincher and a pitcher-inner. In a down economy, every single penny counts. Just ask your boss—he's probably spending nights lying awake trying to figure out ways to cut corners around the office to keep the company running and you employed. Better still, don't ask your boss; come up with cost-cutting ideas yourself. It will also show him that you understand how business works and that you are constantly thinking of new ways to improve the bottom line. And don't hesitate to pitch in yourself - even if it means resorting to (gasp!) manual labor.

"Roll up your sleeves and start helping out with the little things around the office, like taking out the trash or cleaning up on Friday afternoons so that your boss can eliminate the added cost of a weekly cleaning service," suggests Gordon. "Volunteer to stay late to help stuff envelopes or get the filing caught up so that there isn't a need to add a part-time intern to the payroll. It may seem like small potatoes to you, but those costs add up. Your employer will appreciate the breathing room, and your work ethic will stand out."

"The truth is that there will always be someone smarter than you, or who has more experience or a longer, more impressive résumé," says Gordon. "But no matter what other people have, take a cue from Will Smith: You can always, always ensure that you will work harder. It's a proven virtue and one that our nation was founded on. Hard work won't let you down.

"Make sure that when others are sleeping, you are working," he adds. "When they are wasting time, you are improving. And when others are scattering their energy, you are practicing and zoom focusing on the skills it takes to do your job right. If you infuse your talent with hard work, passion, and a drive for excellence, you'll find yourself at the top of the ladder when everyone else is scrambling to stay on a lower rung."

About the Author:
Jon Gordon is a speaker, consultant, and author of the international bestseller The Energy Bus: 10 Rules to Fuel Your Life, Work and Team with Positive Energy and The No Complaining Rule: Positive Ways to Deal with Negativity at Work. Jon's new book, Training Camp: What the Best Do Better Than Everyone Else, was released in May of 2009.

The message in Jon's books and speaking presentations is such that NFL coaches such as Jack Del Rio, Mike Smith, the PGA Tour, and the FBI have called on Jon to inspire and benefit their teams. Jon and his books have been featured on CNN, NBC's Today Show and in Forbes, Fast Company, O Magazine, The Wall Street Journal, and The New York Times. Clients such as the Atlanta Falcons, Campbell Soup, Northwestern Mutual, Publix Super Markets, and JPMorgan Chase also call on Jon to bring out the best in their leaders and teams.

Jon is a graduate of Cornell University and holds a master's in teaching from Emory University. When he's not speaking to businesses or schools, you can find him playing lacrosse or basketball with his wife and two "high energy" children.

New South Construction Supply Locations

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

Mail: PO Box 512 Columbia, SC 29202

Sales Managers - Jon Black, Julie Ham Operations Manager - Rodny Dahlgren 803.451.7027 Product Sales: 803.791.8700 Accounting: 803.451.7045 Toll-Free: 800.849.6768 Fax: 803.791.8191 President - Jim Sobeck 864.325.6518 CFO - Kurt Herwald 864.915.5813 VP Purchasing - David Hodgin 704.358.9797 Controller & IT Manager - Jimmy Sobeck 803.451.7040

Other Locations

9 N. Kings Rd Greenville, SC 29605 Phone: 864.269.7007 Toll-Free: 800.849.4454 Fax: 864.269.6004 Operations Manager- Rob Hovanec Sales Managers- Russ Lott & Jey Yates Road and Bridge Sales Manager: Scott Hendrix

1427 Mechanical Blvd Garner, NC (Raleigh) 27529 Phone: 919.662.9012 Toll-Free: 800.849.4677 Fax: 919.662.9412 Operations Manager- Vic Murray Sales Manager - Larry Smythe

Other Locations

4987 Banco Road N. Charleston SC 29418 Phone: 843.760.0780 Toll-Free: 888.224.3140 Fax: 843.760.6127 Operations Manager- David Starr Sales Manager - Bailey Williams

9050 D W. Market St. Colfax (Greensboro) NC 27235 Phone: 336.992.0237 Toll-Free: 800.609.0889 Fax: 336.992.0839 Operations Manager- David Perkins Sales Manager - Kearns Cheek

180 Rodeo Drive Myrtle Beach SC 29579 Phone: 843.236.6447 Toll-Free: 800.821.2676 Fax: 843.236.6521 Operations Manger- Peter Bemisderfer Sales Managers - Clint Paul, Russell Davis, Frank Crouse

140 Dorton St Charlotte NC 28213 Phone: 704.358.9797 Toll-Free: 866.375.9660 Fax: 704.358.9646 Operations Manager: Adam Kent Sales Managers: Chris Daleus, Rick Bunch, Julie Ham, Angie Puckett

358 Industrial Park Rd Hardeeville (Hilton Head) SC 29927 Phone: 843.784.1580 Toll-Free: 866.326.8802 Fax: 843.784.1581 Operations Manager - Artie Helmey Sales Manager- Steve Melton, John Pickhardt