New South Construction Supply eNews - June 2011

 

Dear Friends:

Half the year is over and the construction economy is not recovering as much as was projected late last year. Residential construction still faces the challenge of too much product on the market and more product to be dumped on the market due to upcoming foreclosures.  On the commercial side, private construction is still hampered by inadequate financing and concerns that consumers are still hesitant to spend money. Government spending for construction was still pretty strong in the first half but many forecasters expected this to decrease in the second half due to pending budget cuts in Washington. In other words, it isn’t yet time to break out the champagne and party hats. We have a ways to go before construction is back to pre-2008 levels.

As has been the pattern for the last three years, the weak economy has not kept most manufacturers from increasing prices for most construction materials. See below for a more detailed look at the commodity products we sell.

Scrap steel prices increased in early June by approximately $30.00/ton. China and some European countries made large purchases of scrap steel and as a result the price increased after two months of price declines. Although the price for crude oil fell recently, as did the price of natural gas, resin prices continued to rise in June and resin manufacturers have indicated further increases will be forthcoming in July. Metal alloy prices rose in late May and early June, mostly due to worldwide inflation fears, and many analysts expect prices to increase even more in July.

Due to the rising price of scrap steel, domestic and foreign rebar manufacturers announced they will increase prices in July. Nucor, Gerdau Ameristeel, and other domestic rebar manufacturers announced in mid-June that they will increase prices by $20.00/ton for their July rollings. The July price increase will put rebar prices at the same level as they were prior to the industry wide price decrease of $20.00/ton, which was implemented by domestic rebar mills in mid-May. As scrap steel prices are now expected to continue to rise into July, most industry analyst expect rebar manufacturers to increase prices for their August rollings. If you have any upcoming projects that require rebar, we advise you to buy out these projects in June to avoid the July increase and further possible increases in August.

Concrete reinforcing wire mesh manufacturers will also increase prices July 1st by approximately 8% over current price levels. In late May and early June, wire mesh prices softened somewhat as domestic demand remained weak. With the price for scrap steel having increased and with scrap steel prices expected to continue to increase even more, domestic wire mesh manufacturers have indicated they will hold firm on the July price increase, due to losses they have incurred over the past two months, as prices fell. As with rebar, you would be well served to buy out any projects you have prior to July that require concrete reinforcing wire mesh.

Wire rod and steel plate manufacturers, both domestic and foreign; have announced price increases for July and some have already increased prices. As a result, masonry reinforcing and tie manufacturers have indicated they will implement a price increase of approximately 10% in July. Representatives of Wire Bond and Hohmann & Barnard, the two largest domestic manufacturers of masonry reinforcing and ties, have said that official price increase notices will be sent to their distributors the week of June 19th. You should consider buying out any upcoming projects before July 1st to avoid the July price increase.

Manufacturers of construction materials made from polyethylene resins continue to increase prices due to higher resin costs. Polyethylene sheeting manufacturers increased prices by 6% in early June and manufacturers have indicated that they will increase prices again in July by another 5 to 6%, as resin manufacturers will increase prices by another $.05/lb in July. Most polyethylene construction foam manufacturers (backer rod, foam expansion joint, etc) have announced price increases of 4 to 8% for July and another price increase by polyethylene drainage pipe manufacturers is expected in July or early August. Be sure that you factor in the pending price increases for these products when you are preparing your bids.

Although copper thru-wall flashing prices have remained stable for the past two months, manufacturers will increase prices in July, due to the recent increase in the price for raw copper. Manufacturers are expected to increase prices by about 10%, and as the price for raw copper is expected to continue to increase, expect copper thru-wall flashing prices to increase in August or early September.

Construction chemical manufacturers continue to be hit with higher raw material and transportation costs and as a result, several manufacturers increased prices in June or have announced prices increases for July. Most are also charging their distributors a fuel surcharge for all orders or have increased the amount of the fuel surcharge, which in essence is a price increase for the distributor and contractor. Be sure that you get a current quote from a distributor when you are buying out projects or preparing your bids.

Manufacturers of nearly every type of asphalt based construction products have either increased their prices recently or have indicated they will increase prices soon, due to increased costs for asphalt and other raw materials. These items include sheet membrane waterproofing, peel-n-stick thru wall flashings, air barriers, liquid membrane waterproofing, mastic, primers, damproofings, etc. As with construction chemicals, get a current quote prior to bidding any projects, as in all likelihood the price will be higher than when you last purchased these products.

The PPI tables are out for May. Click on the preceding link to view them.

This month we are showcasing the following three manufacturers:

  • Rmax is a long time supplier of ours for polyiso roof and wall insulation. They have very competitive pricing, high-quality, and three plants so you don’t risk not being able to get product if they have a production problem at one of their plants. See below for more information on them.
  • Prosoco is best known for their masonry and block cleaners but they also are rapidly becoming known for their R-Guard® FastFlash Air & Waterproof Barrier Systems. See below for more details.
  • Ardex Engineered Cements it is a worldwide manufacturer of cement products. They are well-known for their self-leveling underlayment as well as their patching and repair products. To learn more about Ardex, just scroll them.

The title of this month’s management article is Gaining Cooperation. Those of us who have been in management for a while know that gaining the cooperation of our coworkers is critical to success. Given that, I think you will enjoy this article.

In closing, I hope that the second half is better than forecasters are calling for. As always, let us know whenever we can be of service.

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:

 

Click the image below for the full size ad

Prosoco

 

R-Guard® FastFlash Air & Waterproof Barrier Systems

Made for fast, easy installation in real-world conditions

Don’t wait for rain-soaked surfaces to dry. Instantly waterproof, FastFlash Air & Waterproof Barrier products apply fast and easy to wet or dry plywood, Densglass, OSB and other sheathing. The FastFlash system is durable, structural, breathable, and continuous. It’s tested – and proven – under real-world conditions, far beyond industry and ASTM standards, to stop destructive, costly air and water leaks through the building envelope in weather from a mild Spring Day to a Category 5 hurricane. This and all PROSOCO products are available at all New South branches.


ARDEX the industry innovation leaders delivers the comprehensive line of best-in-class ARDEX MC™ Moisture Control Systems, providing fast-track solutions for even the most difficult environments when there is moisture issues in concrete.

ARDEX MC™ ULTRA – For the most demanding environments - When waiting for the slab to dry is not an option
ARDEX MC™ PLUS – The most versatile moisture control system - No sand broadcast required for underlayments installed at 1/4" or less
ARDEX MC™ RAPID – The fastest moisture control system available – Install ARDEX Underlayments in just 4 hours

New South Supply carries the full line of ARDEX MC™ Moisture Control Systems, ARDEX Self-Leveling and Trowelable Concrete Underlayments and Toppings.



June's Management Article

Gaining Cooperation

Three maxims for successful negotiation

By Carl Van

"Everything you know is wrong. Black is white, up is down and short is long. And everything you thought was just so important . . . doesn't really matter anymore."  – Weird Al Yankovic

If you are a fan of the show "Seinfeld," you will remember an episode where George concludes that every single decision he made and every single approach he took in his past was wrong. Every gut instinct he had always led him to disaster. So he incorporates a new philosophy: if every single thing that he had ever done was wrong, then the opposite must be right. And from that point forward, instead of doing what he would normally do, he does the exact opposite. Of course things work out very well for him. He gets a new girlfriend, he gets a new job, and his life becomes quite blissful (for a while).

Sometimes, in order to be persuasive, businesspeople tend to argue and try to prove others wrong, which is the exact opposite of what you should do. In fact, those arguing will be very detailed in pointing out why other's beliefs are wrong so they give in. This usually doesn't work very well, and then you just have a battle on your hands that isn't needed.

Negotiation Maxim No. 1:
Great negotiators never argue with reasons; they argue the facts.

What are you negotiating? Negotiations are for cooperation. And when negotiating for cooperation, the very best negotiators never argue with people's reasons; they argue with facts.

When you argue with someone's reasons, you are trying to prove them wrong. In fact, most people believe in order to convince someone you're right, you have to show them that they are wrong. It is just a natural response. It's the old "let me show you that you are wrong so that you will see that I am right" impulse.

Negotiation Maxim No. 2:
You never have to prove anyone wrong; you only have to prove yourself right.

So what do great negotiators do with people's reason if not argue? Well, like George, try the opposite.

The opposite of proving someone wrong is to simply acknowledge where they are coming from. Effective communicators use the tool of acknowledgement to gain cooperation and save time.

In the event you are trying to be persuasive and gain someone's cooperation, use these three steps:

  1. Ask why they don't want to cooperate
  2. Acknowledge their reasons as valid
  3. Return to the facts

Negotiation Maxim No. 3:
People will consider what you have to say, to the exact degree you demonstrate you understand their point of view.

Here is an example. Mike works at a department store in the customer service area. His main job is to deal with people who want to get a refund for a product that did not meet their expectations or did not work properly. Rhonda is a recent customer who has brought in an item to return.

Mike: Okay, Rhonda, in order to process this return, all I need to do is get a statement from you on what was wrong with the product or how it didn't meet your expectations.

Rhonda: I don't want to give you that.

Mike: Well, why not?

Rhonda: Because you will just use it against me.

Mike: Why would I use that against you? That doesn't make any sense.

Notice how Mike immediately tried to show Rhonda she was wrong? Mike should remember three important things:

People will consider what you have to say, to the exact degree you demonstrate you understand their point of view. Great negotiators never argue with reasons, they argue the facts. You never have to prove anyone wrong, you only have to prove yourself right.

Here is how Mike might have handled it:

Mike: Okay, Rhonda, in order to process this return, all I need to do is get a statement from you on what was wrong with the product or how it didn't meet your expectations.

Rhonda: I don't want to give you that.

Mike: Okay, can I ask why?

Rhonda: Because you will just use it against me.

Mike: You know, Rhonda, if you don't want to give me a statement about the product and why you're returning it because you are concerned that I am going to use it against you, then I can certainly understand why you don't want to give me a statement. That makes sense.

I just want to let you know that the purpose of the statement is not to use the information against you. In fact, the reason I need the statement is to document the file to be sure that you do get a full refund and that you do get everything that you are entitled to. If you'll give me a statement of facts, I will be able to process your return and you can be on your way.

Did you see how Mike took the time to acknowledge Rhonda's reasons and skillfully return to the facts at hand?

Notice what Mike did in this case. He completely reduced Rhonda's uncooperativeness by acknowledging it. Notice he did not agree with it, and notice he did not say, "yes, you are right." He simply acknowledged where Rhonda was coming from. He called the customer a reasonable person. She's reasonable for the way she feels. The fact that Mike took the time to tell this customer that she was a reasonable person for the way she feels is going to allow her to change her mind (which, of course, is all he wanted in the first place).

Stop trying to prove other people wrong, and stick to proving yourself right. It's easier and a whole lot less stressful.

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- Andrew Myers 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 Manager - Frank Crouse 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