New South Construction Supply eNews - June 2009

 

Dear Friends:

As I write this letter at the end of June we continue to be in the midst of very challenging times. Two of the top five lumberyard chains in the US have filed for bankruptcy in the last month, Concrete Accessories has closed their doors, and GM and Chrysler have filed for bankruptcy, as have many other companies around the country. The writing is on the wall that the long run of prosperity we enjoyed since Ronald Reagan took office in 1980 is over and “business as usual” is anything but that.

I’ve been accused of being too negative in some of my letters but anyone who knows me knows that I’m an incurable optimist. However, I temper that with a hefty dose of realism and right now anyone who isn’t very concerned about the economy has their head in the sand.

Reed Construction Data reports that nonresidential starts are down 6.2% for the first five months of 2009 compared to the same period in 2008. They say that a turnaround is still many months away and that year end might be the soonest we will see even a small recovery. Several economists are predicting that commercial real estate is the other shoe to drop and that the downturn in the commercial real estate market will be even worse than the downturn and residential real estate. Sales of commercial real estate are off 89% year-to-date versus last year. There were no commercial real estate transactions at all in 35 of 79 markets in the US during the first quarter. Retail space will take a particularly hard hit as consumers are now saving and cutting way back on shopping. About a year ago the savings rate in the US was about zero and it’s about 5%. While it’s good that people are finally saving, it is having a very negative effect on retailers. Some malls are going to close and some will have very high vacancy rates.

On June 16 the International Monetary Fund stated that they are now expecting the US economy to contract 2.5% this year and to have a paltry GDP increase of .75% next year. I was also recently attended a financial conference where several forecasters were in agreement that when we come out of this downturn we will be looking at approximately eight years of average GDP growth of just 2% while we pay down the huge mountain of debt the government is incurring trying to spend their way out of this recession.

Based on all of the above we continue to pinch every penny while selectively adding new salespeople and new product lines. We hope that the government stimulus plan will kick in soon as it’s had very minimal affect on construction thus far.

Given the above it’s hard to believe that several commodity suppliers are trying to push through price increases. For more specific information about commodity pricing please see below:

It now seems as if the low prices for construction materials that the industry has seen over the past 6 to 8 months are now at an end for many items. Prices for commodity items continue to rise, although the world wide economic downturn continues. Much of the increases for commodities are due to the declining value of the dollar. The price of crude oil price is now over $70.00/barrel, natural gas prices continue to rise, and scrap steel and metal alloys are once again up in early June. Increases for commodities over the past several months are now contributing to increased prices for many construction materials.

After months of declining prices for masonry reinforcing, ties, and anchors, manufacturers of these items have all announced a price increase of 10 to 15% effective in July. The increase is mainly due to manufacturers’ increased costs for wire rod, which has increased by over $30.00/ton since April. Most also analyst foresee another price increase for wire rod in July, so it is expected that masonry reinforcing manufacturers may increase prices again in August or September. If you have any upcoming projects that require masonry reinforcing, ties, or anchors we recommend you buy out these projects now in order to avoid the July price increase.

As noted in last month’s newsletter the price for raw copper has increased by over 50% since January. Copper thru-wall flashing manufacturers’ inventories of lower priced copper that they purchased in late 2008 or early 2009 have now almost all been used up and they have begun manufacturing copper thru-wall flashing with higher priced copper purchased later in 2009. Asphalt, which is also used in copper thru-wall flashing, has also increased drastically over the past several months. Due to their increased costs for these materials manufacturers of copper flashing will increase prices between 8 to 12% in July. Manufacturers of stainless steel flashing will also increase prices by 5 to 7% in July due to their increased cost for stainless steel. As with masonry reinforcing, if you have upcoming projects that require copper or stainless steel flashing, we recommend you consider buying out these jobs now.

Polyethylene manufacturers increased prices in mid-June by approximately 5% in June, due to their increased costs for resins. Resin manufacturers have already announced another price increase of $.05/lb for July shipments, as natural gas prices continue to increase. Faced with another resin increase, most polyethylene manufacturers expect to increase prices again in July by as much as 7%.

Although overall domestic demand for rebar remains weak, there are spot shortages of certain sizes now. This is due to domestic rebar mills cutting production and Gerdau Ameristeel closing two plants recently in the eastern US. Also, Georgetown Steel “mothballed” their plant in May, which manufactured rebar coils. Because of these production cuts and recent plant closings, many analysts expect availability to be of concern into the summer. Although no domestic mill to date has announced a price increase for July, many industry analysts expect rebar mills to increase prices in mid- July or early August, due to their increased costs for scrap steel .

Concrete reinforcing wire mesh prices have “firmed up” over the past couple of weeks, after months of decline. Wire rod manufacturers increased prices in May for June orders and have already announced another price increase for July shipments. Although some concrete reinforcing wire mesh manufacturers announced they would increase prices in July due to their increased costs for wire rod, the industry would not support the increase and prices will remain flat for July shipments. If demand increases, expect wire mesh manufacturers to try and increase prices in August.

This month we are spotlighting the following suppliers:

  • Euclid Chemical is one of the oldest and most diverse manufacturers of construction chemicals, grouts, powders, and the like. They have a very broad product line and are well known for high quality products and for being in most specs. We stock more Euclid products than anyone in the Carolinas and look forward to meeting your needs in the future.
  • Hohmann and Barnard is one of the premier manufacturers of masonry reinforcement, flashing, and through their subsidiary, Foamtastic, foam expansion joint material. We stock all of their products and encourage you to learn more about them by viewing their ad below.
  • Raven Industries is one of the top manufacturers of vapor barriers and related products. To see more information about their product line, please scroll down. Also remember to let us give you a quote whenever you need any of their products.

This month’s management article is entitled “The Role of a Leader”. Leadership is needed now more than ever so I hope you’ll pick up a few tips from this article.

In closing, I hate to sound so pessimistic but I have been reading everything I can about the economy, as well as going to a major financial seminar, and I wanted to pass on to you what I’ve heard. I hope I’m wrong, but my gut is telling me that I’m not. There is nothing I would like more than to be dramatically wrong about the future. In the meantime, hang in there and know that we are extremely grateful for your business and support.

Sincerely,

Jim

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

This month we are featuring the following suppliers:

VaporBlock® Under Concrete Slab Vapor Retarder / Barrier

VaporBlock® is a high performance vapor retarder/barrier designed to control moisture migration under concrete slabs and foundations.  VaporBlock® has quickly become one of the most effective vapor retarders/barriers on the market today! 

●    Unequaled Tear & Puncture Strengths

●    NEW Ultra-Low Near Zero Perm Rating

●    Resistant to Decay, Mold & Mildew

●    Meets ASTM E-1745, Class A, B and C

New Addition!       VaporBlock® Plus Underslab Moisture & Gas Barrier!

                                  Effective against radon, methane and other harmful VOC’s.


NEW HB-200-X

Hohmann & Barnard has been manufacturing the HB-200 Veneer Anchor for over 10 years. The NEW HB-200-X improves upon the standard HB-200 by adding three pronged punchouts that project from the back of the anchor. The prongs prevent positive wind-loads from crushing the wallboard by transferring these loads back to the stud. The HB-200-X and all other Hohmann & Barnard products are available at all New South locations.

Patends Pending

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

June's Management Article

The role of a leader

Leaders must know the qualities of high-performance teams as well as the required steps to reach that level.

by Brian Tracy

Your ability to negotiate, communicate, influence and persuade others to do things is absolutely indispensable to everything you accomplish in life. The most effective men and women in every area are those who can quite competently organize the cooperation and assistance of other people toward the accomplishment of important goals and objectives.

Of course, everyone you meet has different values, opinions, attitudes, beliefs, cultural values, work habits, goals, ambitions and dreams. Because of this incredible diversity of human resources, it has never been more difficult and yet more necessary for diplomatic leaders to emerge and form these people into high-performing teams.

Fortunately, leaders are made, not born. You learn to become a leader by doing what other excellent leaders have done before you. You become proficient in your job or skill, and then you become proficient at understanding the motivations and behaviors of other people. As a leader, you combine your personal competencies with the competencies of a variety of others into a smoothly functioning team that can outplay and outperform all its competitors.

When you become a team leader, even if your team only consists of one other person, you must immediately develop a whole new set of leadership skills. In order to determine what these skills are, you need to consider the genesis of high-performing teams.

Teams generally go through four phases as they evolve toward high performance. These stages are called forming, storming, norming, and performing.

Forming
The forming stage is very important, perhaps even critical, to the success of the team. Your ability to select the proper team members in order to accomplish a particular task -- personal or business -- is the mark of the superior leader. If you select the wrong people in the first place, it becomes almost impossible afterward to build a winning team, just as it would be impossible to win athletic championships with unskilled or ill-suited players.

In the forming stage, the team members come together and begin to get a feeling for each other. There will be a good deal of discussion, argument, disagreement, personal expression of likes and dislikes, and the forming of friendly alliances between team members.

This stage, especially the discussions and conversations that take place, may seem time consuming, but it is absolutely indispensable to the development of a unified group of people that you can lead. One of the most important qualities of a leader is that of patience. And patience is never more necessary than when you are going through the early stages of assembling your team.

Storming
The second stage of team development is called storming. Storming is a shortened form of the word brainstorming. It is during this stage when the group, whose members are now comfortable with each other, begins the hard work of setting goals and deadlines, dividing up the tasks, and getting on with the job. During the storming phase, people learn about the contributions that each member can make to achieve the purposes of the team.

Norming
The third stage of team development is called norming. This is where norms and standards are established among the team members so that everyone feels secure and confident in his or her place. All members know what is expected and how it will be measured. And all members are aware of the responsibilities and obligations they have, not only to the job, but to the each other. Your ability as a leader to promote the norming process is critical to the success of the team.

Performing

The fourth stage of team development is performing. In the final analysis, your ability to get results is all that really matters. Your lifestyle, your rate of promotion and level of rewards, and your respect and esteem among your co-workers and bosses will all be determined by your ability to perform and to get others to perform.

There are basically five qualities of the most productive work teams that you need to foster throughout the stages of team development. The degree to which you accomplish this before you start working will determine your success as a team leader and the success of the team as a whole.

Shared values
The first quality is the existence of shared values. You can foster this quality by asking the question, “What are our values?” or, “What do we stand for?”

People will contribute the values they consider the most important. As they do, you or someone else can write them on a flipchart. The values will usually be something like: integrity, excellence, quality, caring about people, profitability and harmony.

Shared objectives
The second quality of top teams is shared objectives. It is absolutely essential that everyone takes the time to discuss the actual reason for forming the team and the chief results that are expected of them.

Leaders are those who can see the big picture. They are absolutely clear about what it is they want to accomplish and what it will look like. They have the ability to articulate this vision in the minds and hearts of others and to get everyone, no matter what their background or personality, working together in harmony toward the realization of that vision.

People cannot hit a target they cannot see. Again, even though it may appear time consuming, everyone needs to have ample opportunity to discuss and agree on the ultimate goals desired before work begins. The more thorough the discussion on goals and objectives, the more effective the team will be when it begins working.

Shared activities
The third quality of highly productive teams is shared activities. Everyone knows what they are supposed to contribute to the achievement of the overall goals and objectives of the team. Everyone also knows what each of the other members is expected to do. All the work that has to be done is clearly divided up among the team members, and everyone knows their role in the process.

Lead the way
The fourth quality of high-performing teams is that the head of the team leads the action. You become the role model for all of the others. You go out in front. You continually look for ways to make it easier for your team members to do their jobs. You accept complete responsibility for the achievement of the overall goal.

You start a little earlier, you work a little harder and you stay a little later. You set careful priorities on your time and you always work on your highest value tasks. You never ask anyone to do something that you wouldn’t do yourself. You always put yourself out in front and go to bat for your people in every circumstance. You are a leader because you continually lead.

Evaluation
The fifth and final quality of high-performing teams is that individually and as a group, they continually evaluate their progress toward their goals and values.

They are always asking themselves, “How are we doing, and how can we do better?” When they manufacture or sell products in the marketplace, they ask their customers for ongoing feedback and evaluation. They set incredible standards of excellence and they are constantly striving to be better.

Whenever they have problems, misunderstandings or difficulties within the team, they reexamine their values, their goals, their activities, their assignments and their responsibilities. They are more concerned with what’s right than with who’s right. They are more concerned with winning than with not losing.

High-performing teams run by excellent leaders, are determined to perform in an excellent fashion. All members know that their ability to work together in harmony and cooperation is the key to the success of every one of them.

The wonderful thing about becoming a leader in your work and personal life is that you can practice the skills of influencing and persuading others toward a common objective. You can promote the principles of excellent teamwork by establishing your values and goals, determining your activities, and then leading the action. And you can improve yourself by continually evaluating your performance against your standards.

One of the marks of excellent people is that they never compare themselves with others. They only compare themselves with themselves and with their past accomplishments and future potential. You can become an even more excellent person by constantly setting higher and higher standards for yourself and then by doing everything possible to live up to those standards.

The more proficient you become at getting the results for which you were hired, the more opportunities you will have to get results through others. And your ability to put together a team and then to lead that team to high performance will enable you to accelerate your career and fulfill your goals faster than ever before

New South Construction Supply Locations

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

Mail: PO Box 512 Columbia, SC 29202

Sales Managers - Jon Black, Julie Ham Operations Manager - Rodny Dahlgren 803.451.7027 Inside Sales Manager - Donald Whatley 803.451.7028 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 864.268.3970 VP Purchasing - David Hodgin 704.358.9797 Director of Finance and Operations - Dave Lewis 803.451.7025

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

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

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 Managers - Kearns Cheek

180 Rodeo Drive Myrtle Beach SC 29579 Phone: 843.236.6447 Toll-Free: 800.821.2676 Fax: 843.236.6521 Operations Manger- George Acerbi Sales Manager- Clint Paul

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 Managers- Steve Melton, Ray Bryant, Nick Turner