Dear Friends:

Since last month’s newsletter we’ve seen some glimmers of hope regarding the economy. Recently the stock market had its best week in quite some time and it appears that the banking bailout plan and the stimulus plan are taking effect and having positive results on our economy. Only time will tell if this is a blip or the beginning of a recovery. Let’s hope it’s a recovery!

The AGC recently released their construction Outlook for 2009. It’s pretty much as expected but there are some areas that are projected to increase. To view the slideshow on this click here. The AGC also released the latest PPI charts and tables.

There hasn’t been much change in commodity prices since last month. See below for the latest information on the key products we sell.

Prices for most construction materials held steady in February and early March, as worldwide demand remains weak. Many commodity items, such as scrap steel and metal alloys fell in early March after rising in January and early February as the worldwide economic recession continues. The price of crude oil and natural gas has risen and higher prices for these commodities are having an impact on prices for some construction materials.

Polyethylene and PVC resin manufacturers raised prices again for March orders by approximately $.05/lb after increasing prices by approximately $.10/lb in February.

As reported in last month’s newsletter, most polyethylene manufacturers purchased heavily in January, prior to the February resin increase. Although demand remains weak, most manufacturers will deplete their inventories of lower cost resins by the end of March. Unless resin manufacturers reduce their prices, polyethylene film should increase in April. Some polyethylene manufacturers, who had to purchase resin in February have already tried to increase prices, but due to weak demand and competition, they have been unable to do so. Expect prices for polyethylene to increase by 5 to 8% in April.

Although prices for PVC resins has increased, manufacturers of PVC construction materials such as thru- wall flashings, sheeting, and waterstops have not increased prices. Weak demand continues to force manufacturers of these types of construction materials to hold their prices. Unless demand increases, expect prices for PVC construction materials to remain at current levels for the next few months.

Due to the falling price of scrap steel and weak demand, Nucor announced on March 13, that they would decrease prices for rebar by $1.25/cwt effective immediately. Some domestic mills had decreased prices earlier in March, and Nucor was forced to decrease their prices to remain competitive. It is expected that domestic mills will hold prices at current levels for April rollings.

Concrete reinforcing mesh prices held steady in February and early March. With the price for scrap steel falling, many analysts expect wire rod manufacturers to decrease prices in March or early April. If wire rod prices do decrease, expect concrete reinforcing prices to decline slightly in early April.

Masonry reinforcing and tie prices remained steady in March and prices are expected to remain at our about their current levels in April. Demand for masonry reinforcing and ties are expected to increase this spring, as several school projects in the Carolinas will be coming out of the ground. If demand does increase, expect prices to hold steady or even rise moderately in late spring.

Copper thru-wall flashing manufacturers were expected to increase prices in April, as the price for raw copper increased in early February. Because raw copper prices fell back in late February and early March, manufacturers will not increase prices for April. If the price of raw copper continues to decline, copper thru-wall flashing prices may decline in late spring.

Note: Historically, most construction chemical manufacturers have increased prices in the spring or early summer, in anticipation of demand increasing during the spring and summer construction “selling season”. Due to the current economic situation, none of the major manufacturers of construction chemicals has announced an increase, and many have said they will not be increasing prices this spring or summer.

This month we are putting the following suppliers in the spotlight so that you’re aware that we sell these fine products:

• Zurn Flo-Thru is the preeminent supplier of preformed trench drains in the construction industry. They have a wide variety of sizes and shapes, as well as numerous types of grates ranging from purely functional to highly decorative brass grates. The next time one of your projects calls for trench drains, please give us the opportunity to give you a quote.
• 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.
• Akrotex, Inc. is one of the top manufacturers of polyethylene film for use as a vapor barrier and other construction uses. They have one of the most modern plants in their industry so they can produce both high volumes of product with great quality and a very competitive price. See below for more information about Akrotex.

This month’s management article is entitled Why me? So that! This article gives some ideas of how to deal with challenges in your life and business. Given the challenging times we’re living in I thought this would be of interest.

Let’s hope that the coming of spring coupled with the banking bailout plan and stimulus plan taking root will cause the construction industry to get back into growth mode. As always, thank you for your business and please don’t ever hesitate to let me know how we can serve you better.

Best Regards,

Jim

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