Dear Friends:
First off, Happy Thanksgiving! Despite the challenging times we are experiencing we still have a lot to be thankful for. I urge you to make the most of the Thanksgiving holiday and I hope that spending time with friends and family recharges your personal battery and helps you get ready to take on the challenges ahead of us.
What a difference a month makes! When I composed my Presidents Letter last month, things were pretty dicey in terms of the construction economy, and, over the last month, things have gone from bad to worse. The global economic crisis has gone from Wall Street to Main Street and is affecting almost everyone I know, both business-wise and personally. It looks like were going to be in for a tough slog in 2009, but, in a perverse way I always enjoy these challenges because those companies who emerge from such challenging periods emerge leaner and stronger from the experience. Its kind of like the brush fires that people intentionally set on their land to burn out the underbrush that is choking off the air and water supply to the larger trees. By clearing out the underbrush in our industry we all will be better off.
While we are mostly hearing bad news, there are some pieces of good news to share with you. One is that our new President is committed to spending billions of dollars on public works projects to get people back to work. Expect to see a lot of road and bridge contracts, contracts to build or remodel public buildings, such as courthouses and VA hospitals, as well as increased educational construction spending. The government has already approved significantly increased budgets for the Department of Defense and spending for buildings on military bases. These contracts have largely already been let but expect that to fall off as President-Elect Obama is probably going to cut back sharply on military spending.
Click
here
to see the 2009 construction forecast from the Association of General Contractors (AGC). Ken Simonson, the chief economist for the AGC has proven to be one of the more accurate forecasters out there, so I recommend you take a few minutes to look through his forecast. You will see that while his forecast does show a decrease in commercial construction spending, there are still billions upon billions of dollars committed to construction projects for 2009. Will you get your fair share?
Given the challenging economy, we have been looking for ways to help our customers with their cash flow challenges. To that end, we have come up with a way where you can get extended payment terms for your purchases from us. We have teamed up with a company that provides financing only to construction companies, and they have a lot of money to lend companies like yours.
The way this program works is that you will pay for your purchases on the 10th of the second month after purchasing from us. So, depending upon when in the month you make your purchase, you can get as much as 70 days to pay for your purchases from us instead of our normal terms of net 30 days. If you are interested in this, either contact your local New South representative or feel free to email me, and I will get one of our Associates to follow up with you. This extended terms program is available to most of our customers provided that we can get their credit approved by our third-party credit provider. Our experience thus far with them has been that they turn down very few of our customers as we are picky about who we sell in the first place.
The other bright spot in the downturn is that prices on commodity products continue to fall. Some of you have told me you have benefitted from this in that you had fixed price contracts based upon the higher commodity prices from just a few months ago, and now you are able to purchase products significantly less than budgeted as youre buying out your projects. Im glad to see there is a silver lining in the dark clouds looming overhead. For more information about the latest pricing trends, please see below:
Worldwide commodity prices continue to fall due to weak demand and the uncertain global economic outlook for 2009. With prices for steel, petroleum, natural gas, and other commodities at lows for the year, manufacturers of most construction materials have lowered their prices recently or have indicated they will lower prices in December or early in 2009.
Prices for masonry reinforcing and ties declined by approximately 10% in November. This price decrease is due to weak domestic demand and lower costs for wire rod and plate steel. As construction forecasts for the first quarter of 2009 show a decline in spending, masonry reinforcing manufacturers may lower prices again in December or January.
Nucor announced another price decrease for rebar of $9.00/cwt on November 6th effective immediately. Other domestic mills also announced price decreases shortly after Nucors announcement. This is the third straight month that domestic rebar prices have fallen. Declining domestic and foreign demand, as well as lower costs for scrap steel contributed to this price decrease. Most industry analyst expect that rebar prices are now at or near the bottom, so expect rebar prices to remain at current levels for the next few months.
Concrete reinforcing mesh manufacturers decreased prices in late October and early November by 5 to 7% due to lower costs for wire rod and weak demand. Unless demand increases, it is expected that concrete reinforcing mesh prices may decline again in early 2009.
As the price for crude oil and natural gas continued to decline in October and November, manufacturers of construction materials that use derivatives from these products have lowered their prices to distributors.
Plastic vapor barrier manufacturers such as Raven Industries, Stego, and Fortifiber, all lowered prices in late October and November by 5%, as their cost for resins fell by $.02/lb. It is expected that resin prices will decline by another $.02 to $.04/lb by the end of 2008, so expect further price decreases for plastic vapor barriers in early 2009.
Polyethylene prices fell by 6% in November as demand continued to decline. As with plastic resins, polyethylene resin prices are expected to be $.02 to $.04/lb lower for December than in November. With declining demand and lower resin costs, most polyethylene manufacturers will probably decrease prices over the next 30 to 60 days.
PVC resin manufacturers have also indicated that their December prices will be lower than in November. Although manufacturers of PVC flashings, sheeting, waterstops, and other PVC construction materials have not officially announced a price decrease to date, most have indicated that they expect to lower prices in December or January.
Copper flashing prices held steady in November after price declines in September and October. As the worldwide price for raw copper has stabilized over the past 30 days, manufacturers expect prices to remain at or about current levels through the remainder of 2008.
Also, the latest PPI
tables
and
slides are available for your viewing and use with clients.
This month, we are profiling the following suppliers:
- M3 Distribution is a distributor and importer of a wide variety of concrete and masonry accessories. Their main distribution center is in High Point, North Carolina, so they can serve all of our markets very quickly. We found the quality of their products to be outstanding, as is their service. Please look at their ad below for more information about their company.
- 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.
- PrimeSource is a nation-wide distributor of all types of building products. This month we are featuring the concrete accessories we get from PrimeSource. Please see their ad below, and remember to let us give you a quote whenever you need any of these types of products.
This months management article is entitled
The Principals of Persuasion. None of us can ever be too good at persuading people to do what we want, so I think you will find this article to be quite helpful.
In closing, while we are facing a challenging time, most of us have been in this situation before, and we know what to do to emerge from it stronger than we went into it. As always, please let us know if we can be of any help. Happy Thanksgiving and thank you for your business!
Best Regards,
Jim
Jim Sobeck
President
(864) 325-6518
jim.sobeck@newsouthsupply.com
Principles of persuasion
by John Boe
Whether you're conducting a
one-on-one interview, motivating your sales team or delivering a keynote
address, your success as a leader is defined by your ability to persuade with
clarity and passion. In fact, you might say that leadership is synonymous with
effective communication. According to Harvey MacKay, author of the book Swim
With the Sharks, "The No. 1 skill most lacking in business today is
public speaking . . . the ability to present oneself." If you want to stand
out from the crowd, get promoted or develop an award-winning sales team, you
need to polish your communication and persuasion skills.
Throughout history, our
most admired leaders are remembered primarily for their ability to instill
courage and inspire confidence. Just think how different this world might be
without the calming reassurance of FDR's fireside chats or Churchill's defiant
eloquence. President Kennedy once remarked that Winston Churchill had the
ability to take the English language to war. Churchill clearly understood the
power of words and said that he had the English language deep in his bones. He
would spend hours at a time rewriting and rehearsing his speeches and. as a
result, Churchill galvanized a nation with his words.
When We Communicate
Effectively We Succeed!
Whether you're in commission sales or on a salary, your income and career
advancement are directly linked to your ability to communicate and persuade.
The higher you climb the corporate ladder, the more you will be called upon to
speak. It doesn't matter whether you're an agent selling an insurance policy or
a manager goal setting with a sales rep, if you want to focus attention and
gain consensus, paint word pictures.
In her book, Knockout
Presentations, communications coach Diane DiResta suggests using vivid
language. "Metaphors transport the listener to a different dimension. They
grab hold of the mind and stimulate the imagination. The brain thinks in
pictures, not words." Analogies, metaphors, stories and anecdotes all work
together to help you create vivid word pictures to keep your listeners
emotionally involved.
Communication
Strategies
Psychologists tell us we are born into one of four primary temperament styles:
aggressive, expressive, passive or analytical. Each of these four styles
requires a different approach and communication strategy. For example, words
that would appeal to a person with the aggressive style may alienate and
actually destroy rapport with the passive style and vice versa.
If a leader is to influence
colleagues and customers, he or she must be able to quickly and accurately
recognize each of these distinct behavioral styles and adapt accordingly.
During your next presentation, make an effort to identify the temperament style
you're presenting to and use as many of these emotionally charged words as
possible.
The aggressive, bottom-line
Worker style is results oriented. They ask "what" questions. Workers
value achievement and fear loss of control. When presenting to this buying
style, use these words:
Control Flexibility Work Bottom line Power Challenge Speed Money
Functional Results Goals Options Hands on Quickly Freedom
Immediately
The expressive, emotional
Talker style is people oriented. They ask "who" questions. Talkers
value recognition and fear loss of prestige. When presenting to this buying
style, use these words:
Fun Entertaining Creative Friendly Simple Incredible Exclusive
Improved Prestige New Ultimate Spontaneous Exciting Enjoyable
Cash Adventure
The passive, harmonious
Watcher style is service oriented. They ask "how" questions. Watchers
value appreciation and fear conflict. When presenting to this buying style, use
these words:
Support Service Family Harmony Dependable Caring Cooperation
Helpful Easy Sincere Love Kindness Concern Considerate Gentle
Relationship
The analytical, cautious
Thinker style is quality oriented. They ask "why" questions. Thinkers
value accuracy and fear being viewed as incompetent. When presenting to this
buying style, use these words:
Safe Scientific Proven Value Learn Guaranteed Save Bargain
Economical Quality Logical Reliable Accurate Perfect Security
Precise Efficient
Magic Words and Power
Phrases
Over time, marketing researchers have consistently found that certain
"magic words" used in phrases and combinations were so compelling
that sales followed the ads just as predictably as spring follows winter. Here
are some power phrases that will create interest, generate enthusiasm and
motivate people to take action!
Guaranteed success Live your dreams Fast, easy access Unlock your
potential Accept no substitute Time tested Go with a winner The results
are in Extra savings One-stop shopping
While it might be true that
some are born with a silver tongue, most people, like Churchill, have to work
at developing their communication skills. A good way to improve your public
speaking is to engage the services of a communications coach, attend Dale
Carnegie training or join a local Toastmasters Club.
Developing the ability to
speak with power and passion takes time and effort to master, but it will pay
off in big dividends.
