New South Construction Supply eNews - February 2011

 

Dear Friends,

I am pleased to finally be able to report some good news. Our backlog is three times what it was a year ago, and most of our suppliers are also saying that their business is improving. Multifamily projects are popping up like mushrooms after a rain storm, as are a lot of school jobs. Residential construction is still in the doldrums but that is no surprise to anyone. There is still way too much supply and way too little demand for a sustained housing recovery. There are, however, some builders that are accelerating construction of starter homes. There is still too much inventory in the move up market and the luxury market but the starter home market appears to be improving in most areas.

It’s great to be able to report some good news after about 2.5 years of a construction recession. Let’s hope that nothing happens to snuff out this budding recovery.

That was the good news. The bad news is the price increases keep on coming for most commodity products. For a more detailed look at commodity prices, see below.

Prices for some commodities, such as scrap steel, "stabilized" over the past few weeks. Scrap steel prices on the Cleveland and Chicago metal exchanges actually fell by $20.00/ton in early February, which is the first price decline in over four months. Although scrap steel prices are down slightly, the cost for many commodities used in the manufacture of construction products continue to increase. Copper hit an all time high of $4.65/lb the week of February 14th and stainless steel prices increased by nearly 15% since early January. Crude oil prices topped $96.00/barrel on February 22nd and are expected to increase to well over $100.00/barrel soon, due to fears of supplies being disrupted as unrest continues in many Middle East countries, particularly in Libya.  The same fears are also are causing natural gas prices to spike. As a result the price of resins made from oil and natural gas are skyrocketing.

Nucor, Gerdau Ameristeel, and SDI, as well as other domestic rebar mills announced that prices for March orders will remain unchanged from February, as scrap prices were down slightly in early February. Although domestic rebar mills will not increase prices in March, prices to the contractor will increase, as the full effect of the February price increase of $45.00/ton has not been passed onto contractors, as many brokers and distributors had ample supplies in stock, which were purchased in December and January. As distributors and brokers sell off their lower cost stock and replenish their inventories, they will have to pass their increased costs onto their customers.

Concrete reinforcing wire mesh manufacturers have also indicated that prices for March orders will remain at February levels, as their cost for wire rod has stabilized. As with rebar, prices to the contractor will probably increase in March, as distributors purchased heavily in January to beat the industry wide February price increase and many have been selling off their lower inventory costs, not replacement costs.

As noted above, copper prices hit historic highs recently and as a result, copper thru-wall flashing prices will rise even more in the coming weeks. Manufacturers began quoting distributors based on "price at time of shipment" in February and all indications are that this policy will remain in effect through March. As copper prices are projected to top $5.00/lb within the next 30 to 60 days, we strongly urge you to buy out any projects which require copper thru-wall flashings to avoid further price increases.

The price for stainless steel continued to increase in February and further increases are expected in March. Some analysts are projecting stainless steel prices to increase by another 15 to 20% in March. If you have any type of stainless steel materials to purchase for upcoming projects, you should purchase these items as soon as possible.

Geotextile erosion fabric manufacturers increased prices by approximately 15% in late January, as resins prices, a petroleum derivative, have risen dramatically since December. Resin manufacturers recently announced they will increase prices for March orders by 20% and as a result, geotextile erosion control manufacturers have indicated they will increase prices by a like amount in March. As crude oil prices have hit a record high and are expected to increase even more over the next several weeks, expect geotextile erosion control manufacturers to increase prices again in April or May.

Plastic under slab vapor barrier manufacturers, such as Raven Industries, Stego, and Viper increased prices in February, as their costs for resins continued to increase. The industry wide price increase in February was a modest 3%, however; resin prices are expected to increase in March and in April, and as a result, most vapor barrier manufacturers have indicated they will raise prices again in March or early April, by as much as 5 to 6%. Be sure that you factor in these increases as you are preparing any bids that require plastic under slab vapor barriers.

Although polyethylene sheeting manufacturers had indicated they would increase prices in February, manufacturers held the line on prices, due to extremely poor demand. Also, the polyethylene resin increase that was announced in January for February was rescinded by resin manufacturers, as there was practically no demand for resins by polyethylene sheeting manufacturers in early February. Although polyethylene sheeting prices did not increase in February, several manufacturers have indicated that they will increase prices by mid to late March, as demand should increase and resin prices are expected to rise as a result of increased demand. The March price increase should be in the 4 to 5% range.

All three manufacturers of extruded polystyrene insulations, The Dow Chemical Co, Owens Corning, and Pactiv announced they will increase prices by 12% in early March. Rising polystyrene resin costs were cited as the reason for this double digit increase and as resin prices are expected to increase even more in the coming months, due to the spike in prices for crude oil, manufacturers are expected to increase prices again by early summer. If you have any projects which require extruded polystyrene insulation, we recommend that you buy out these projects immediately to avoid further price hikes.

Most major manufacturers of sheet and liquid membrane waterproofing systems have announced price increases. Polyguard, Carlisle, and W. R. Grace will increase prices on their entire line of waterproofing products from 3 to 8%, depending on the product, in March. This increase will also include air barriers, flashings, and drain board. If you are bidding projects which require these items, get a current quote from your supplier on these items to ensure that you cover the increased costs for these items in your bids.

After two consecutive months of double digit price increases (January and February), masonry reinforcing and anchor manufactures have indicated that they plan no price increases for the March, as wire rod and plate steel manufacturers will not be increasing prices in March. As scrap steel prices are not expected to increase in March, masonry reinforcing and anchor prices should remain unchanged through April.

Construction chemical and concrete repair products manufacturers’ raw materials costs continue to rise due to increased costs for solvents, Portland cement, polymers, and transportation. Several manufacturers increased prices in January and others increased prices in February, or have announced a price increase for March. Please be sure that you obtain a current quote for any type of construction chemical or concrete repair product you may need when bidding projects, as the prices for these items will almost certainly have increased since the last time you purchased them.

The latest PPI tables are out. Click here to view January PPI Tables.

This month we are featuring the following suppliers:

  • L.M. Scofield is the undisputed leader in decorative concrete products. They have a full array of stains, stamps, sealers, and other related products. See below for information on our liquid color capabilities for their products.
  • Sonoco Products is one of the world's largest packaging companies and is always the leader in innovation. Their Sonotubes with Rain Guard technology allows you to let Sonotubes get wet on a job site without ruining them like forming tubes not using this patented technology. For more information about their newest products, please see below.
  • STO is the worldwide leader in stucco, EIFS, and coatings. Their products are specified on most hotels/motels, high-rises, shopping centers, and the like. The next time you need stucco, EIFS, and/or coatings, please let us know. We're happy to give you a quote.

This month’s management article is titled, The Root Causes of Low Employee Morale. As unhappy employees are incapable of giving quality service to your customers I suggest you take the time to read this article. Very few of us are lucky enough to have a great employee morale after the last three years.

In closing, it gives me a lot of pleasure to finally have some good news to report. Let’s all hope it continues.

Best regards,

Jim

Jim Sobeck President 803-451-7035 jim.sobeck@newsouthsupply.com Connect with us: Twitter | Biz 101 Blog | Facebook | LinkedIn

This month we are featuring the following suppliers:
New South offers the leading brand of liquid concrete color on demand with the Scofield CHROMIX ®-IT 204 Color Center, which quickly and efficiently dispenses CHROMIX® ML Admixtures for Color-Conditioned® Concrete. CHROMIX ML Admixtures are mixed liquid dispersions that provide consistent, permanent, fade-resistant, evenly dispersed, and streak-free integral color-conditioning for vertical or horizontal construction. CHROMIX ML Admixtures are suitable for all types of concrete projects, from floors and hardscapes to cast-in-place or precast walls. Over 450 colors are available.










About Sto Corp.
Sto Corp., based in Atlanta, Georgia, is an innovative world leader and producer of a broad range of versatile cladding and coating systems for building construction, maintenance and restoration. Sto Corp. is ISO 14001:2004 (environmental management) as well as ISO 9001:2008 certified and operates production plants strategically located to serve more than 200 distributor shipping locations across North America. At research and development laboratories in the U.S. and Europe, Sto continues to revolutionize the industry with the highest quality products and application technology.

For more information, visit www.stocorp.com or call toll free (800) 221-2397 or (404) 346-0755. Follow Sto Corp. on Twitter as well as the Sto blog “Building with conscience” at http://www.buildingwithconscience.com/

February's Management Article

The root causes of low employee morale

Focusing on communication can fix them

By John Schaefer

In the movie Multiplicity with Michael Keaton and Andie MacDowell, the character of Doug Kinney (Keaton) clones himself so he can get more work done while having more time for his family and to enjoy himself. As you can imagine, everything goes wrong and at the end there are four Dougs and craziness ensues! Things are pretty stressed at his job as a foreman for Del King Construction. One of the best lines is when his counterpart Ken comes up with an idea to get things moving (and to brown-nose the boss a little). Ken states proudly, "At my old job they used to say, 'If you don't show up for work on Saturday, don't even bother coming in on Sunday!'" It was hysterical in the context of the movie (actually Doug wasn't laughing), but it does lead to one of the root causes of low employee morale.

In these hectic, overworked, understaffed times, it's easier than ever for managers (who are usually even more overworked than their subordinates) to come across something like the Quintus Arrius line to Roman slaves from Ben Hur, " . . . we keep you alive to serve this ship, so row well and live!" It demonstrates how easy it is to come across as a leader who believes that everybody is lucky to have a job, so you better suck it up, keep your nose to the grindstone and don't complain.

Sadly, this view, while effective during this struggling economy, is killing your productivity today, and will lead to significant retention, recruiting and training costs down the road. The moment your employees begin to feel that you don't appreciate them and that they're only on board to row, you have amplified the root cause of low employee morale and it's going to cost you big time.

Here are five suggestions that will help you to avoid destroying morale and experiencing both the hard and soft costs of poorly engaged employees:

Suggestion No. 1 – Form Relationships Built on Trust
Strong, effective relationships are built on trust. If you don't have strong, trust-based relationships with your people, everything you do to recognize them will be seen as manipulation. When employees feel that you are using recognition to "get more out of them" rather than to show that you value them personally, they begin to emotionally disengage and morale suffers. It's not hard to develop trusting relationships with your people, but it does take time, consistency and integrity.

Suggestion No. 2 – Show them Respect
The book "The One Minute Manager" introduces a theory of personal responsibility that allows managers to get maximum results with a minimum of time invested with each staff member. The secret is in showing them respect, defining their expectations and avoiding micro managing. Most employees respond well to being given enough rope to hang themselves, as long as their job is well defined and they are allowed to fail periodically without fear of unrealistic retribution. Respected employees are more alert, creative, and productive. When they do make a mistake, they'll fix it, move on confidently and don't make that mistake again.

Suggestion No. 3 – Nurture Creativity
Once you've built trusting relationships and developed a foundation of respect, employees with automatically respond with more creativity. The best way to nurture and benefit from their new-found creativity is to go by the philosophy that there are no bad ideas, only undeveloped ones. Trusted and respected employees with managers who reinforce the fact that they have some flexibility to try new things will surprise you with the creative ingenuity that they bring to their work. The best part is that you get this for the same price you're paying unhappy employees who are doing just enough to get by.

Suggestion No. 4 – Build Effective Teams
Team building is a more complex challenge than fostering high morale in individual employees. Here are five problems that many teams develop that keep them from being as effective as they want to be in accomplishing company goals:

  • Absence of Trust – due to invulnerability
  • Fear of Conflict – artificial harmony
  • Lack of Commitment – ambiguity
  • Avoidance of Accountability – low standards
  • Inattention to Results – caused by individual status and ego issues

In the absence of trust, morale is at its lowest and self protectionism becomes the rule. It doesn't take a Ph.D. in psychology to realize that this will limit productivity and make work a lot less rewarding for both employees and their managers. This "every man for themselves" attitude destroys teams and makes it impossible to optimize goal setting and achieve corporate objectives in a timely manner; if at all.

By learning to communicate more effectively based on honesty, consistency, vulnerability and respect, your teams will be able to focus unselfishly on common results. This in turn keeps individual egos and agendas in check.

Suggestion No. 5 – Make it Real
One of the first things to stress with your management team is what's called "Making it Real." This means to be genuine and believable in interacting with their people. Employees tend to fall into some common negative habit patterns that employees experience when they feel underappreciated. When your managers understand how to be more open and vulnerable with their staff they work towards trust, respect and improved communication.

"Making it Real" is the answer to the question, "What is the root cause of low employee morale?" Maybe it's because it's so simple that it is so often missed, but without your people believing you are genuine, honest and practicing high levels of integrity, any efforts you make to improve morale will be suspect. If you keep this in mind in your dealings with your people, you will be surprised how easy it is to improve morale, so you can enjoy the benefits of higher productivity, better retention, lower costs and an overall happier, more satisfying workplace.

New South Construction Supply Locations

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

Mail: PO Box 512 Columbia, SC 29202

Sales Manager - Jon Black 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 Manager - Russ Lott

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 - Brian McCormick

1065 Bankhead Highway Winder, GA (Atlanta Market) 30680 Phone: 770.656.2772 Sales Manager - Julie Ham

Other Locations

4987 Banco Road N. Charleston SC 29418 Phone: 843.760.0780 Toll-Free: 888.224.3140 Fax: 843.760.6127 Operations Manager- Frank Crouse 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 Managers - Kearns Cheek, Angie Puckett

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

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

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