August 2020 Newsletter

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New South News

Dear Friends,

Construction continues to be the brightest part of the overall economy, especially here in the Sunbelt. Housing starts and existing home sales continue to boom. The only downside is that lumber mills expected their sales to plummet when the pandemic hit so they shut down some mills, but the opposite happened. People leaving densely populated large cities in the Northeast and North Central US started buying homes in the Southeast and people sheltering in place decided it was a good time to build a deck or other home improvement projects. This strained the reduced lumber supply chain, so prices doubled, and availability became a problem.

See below for a closer look at pricing trends for the main products we sell.

Rebar continues to remain stable for now, but there is potential for a price increase mid to late September. Domestic scrap prices have rebounded and are estimated to increase in September by twenty or thirty dollars per gross ton. A main driver in the scrap rebound has been a healthy export market. US domestic scrap is in high demand internationally and has resulted in higher prices on material being exported. The overall shortage of domestic scrap being produced coupled with some of the available inventory being exported has tightened supply and strengthened the price. There has not been anything firm coming out of the major Southeastern mills, but talk has picked up regarding pending price increases. We would recommend taking advantage of current rebar pricing now before the chance of an increase occurs in a few weeks.

Wire mesh reinforcing seems to be a little ahead of rebar on pending price increases. We have already seen one major manufacturer implement a price increase and expect the other mills to follow in the coming weeks. Mills are reporting a significant increase in orders over the past few months and business seems to be really kicking into gear. With the increase in orders, we are starting to see some lead times extended. There is less sitting inventory available at the mills, and orders are not always able to ship out promptly. The three- or four-day lead times of the past few months has been extended out to five to ten days depending on the need. One item really being impacted are the 10ga rolls of wire. Rolls are currently in high demand and there is very little, if any, inventory of these. Some mills have even restricted the quantity able to be purchased per truckload. We don’t expect the quantity restrictions to be a long-term issue, but it
will have some impact in the short term.

As stated in last month’s report, polyethylene price increases are now being pushed through by most manufacturers. We have received price increase notices from three major manufacturers and expect to see one or two more before the end of the month. Most of these increases are going into effect in early to mid-September. Increases are varying from 5% to 9% depending on the manufacturer. There are still some deals to be found on some older sitting inventory, but that will soon be depleted, and the new pricing will become the norm moving into the fall and winter seasons.

Lumber continues to climb at a historic pace. Last month we reported that lumber was at an almost all time high at roughly $600 per 1000 board feet. As of this month’s report, the rate is roughly $800 per 1000 board feet smashing last month’s numbers. For 2020 lumber has increased a total of 395 units, equating to over a 97% increase since the beginning of the year. Unfortunately, there does not seem to be any reprieve in site. Prices are projected to continue to increase for the foreseeable future.

Lumber is just not in free supply and the mills are nowhere near being able to catch up to backorders and future demand. The lumber market has now become a game of availability. Wholesalers, distributors, and end users are all scrambling to find available material, with little concern regarding pricing. This historic run will continue until either demand drops or availability increases, and we are not expecting either to occur any time soon.

Construction costs diverged again in July, as indicated by producer price indexes (PPIs) that the Bureau of Labor Statistics (BLS) posted today. AGC posted tables showing PPIs relevant to construction. The PPI for new nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of buildings—rose 0.8% for the month, not seasonally adjusted, following a 0.3% dip in June. The y/y gain of 2.3% compared with a rise of 5.8% a year earlier.

Click here for the latest update on the construction economy from Ken Simonson, the chief economist of the AGC.

“Catching up with our Customers”

Meet Mike Mattachione of Mattachione Construction Inc., a New South Construction Supply customer based out of Apex, NC, who is this month’s featured customer in our Catching up with our Customers series. Mike is CEO of this construction business that was originally founded by his father in Canton, Ohio. Mattachione Construction works across the Raleigh/Apex, NC region, where they focus on commercial and residential masonry projects. With more than two decades of experience himself, and the company being founded in 1947, Mattachione Construction prides themselves on being full service, turnkey masonry experts, no matter the size of the masonry or concrete construction project. The construction company has worked on all different types of projects, including industrial buildings, restaurants, hospitals, retail stores, apartment buildings and more. We invite you to read his full Q&A by visiting our New South Construction Supply blog.

Featured Manufacturers


Makers of Chemicals and Aggregates for the Concrete Industry

Access Tile

The ultimate solution in detectable warning systems

Access Tile is the result of responding to a market demand for a better solution to detectable warning tiles at a cost-effective price. With over 20 years of proven manufacturing experience in detectable warnings, Access Tile’s improved design features will exceed industry expectations from specifier to installer.

Simpson Strong-Tie

Connecting systems for wood, steel, masonry, and concrete


Associate Profile

Mason Buffaloe
Manager in Training, Garner (Raleigh), NC

Our Associate Spotlight this month is of Mason Buffaloe, a Manager in Training working in our Garner NC (Raleigh) branch. Mason was born in Guatemala and went to high school at Wake Christian Academy in Raleigh. He then attended the University of North Carolina at Charlotte where he earned degrees in Operations and Supply Chain Management and Management Information Systems. He is single and in his free time he enjoys fishing, skeet shooting, and going to the lake. Prior to joining us in May he worked at Harris Teeter, NC State, and True Homes USA. Mason has a great attitude and is willing to do anything asked of him. We’re looking forward to seeing his career progress.

This month’s leadership article is entitled, How to Prioritize When Everything is a Priority. Prioritization of the tasks assigned to you can be the difference between success and failure. There is a lot of good advice in this article on how to prioritize for success. I hope you like it.

How to prioritize when everything is a priority

By Naphtali Hoff

As leaders, we are faced with many tasks to complete. If we don’t choose carefully, we will often work on the wrong tasks rather than the right ones. By “right,” I mean the tasks that will produce the optimal results and address the most critical issues they face. I also refer to the tasks that we are uniquely qualified and positioned to be working on ourselves instead of delegating to someone else.

When considering what to work on, start with the “big rocks,” the priorities and cornerstones that you first need to “place in your jar” before filling other things (the metaphorical pebbles, sand and water) around it. These could be “one-off” tasks that can be achieved in a single time block (we’ll discuss time blocking later,) or may span several days. If you don’t put the top priorities into your calendar first, all of the other demands will clutter your time and mental bandwidth.

In his “7 Habits of Highly Successful People,” author Stephen R. Covey said it best: “The key is not to prioritize what’s on your schedule, but to schedule your priorities.”

The “big rocks” are commonly called “MITs,” or most important tasks. Whatever term you use, it is critical to identify the tasks that will produce the most important results you’re looking to achieve. Not everything on your plate is of equal importance, so don’t treat them equally.

At the beginning of every single day, create a list of two or three MITs, then focus on getting them done as quickly as possible. So as not to get distracted, keep this short list separate from your general to-do list or task-tracking system. I suggest you write them down on a sticky note or index card that you keep positioned squarely in front of you until the list is complete.

One way to start identifying your MITs is to ask yourself these questions:

1. What are the most 2-3 important things that I need to do today?

Another way to ask this is: “What are the things that — if I completed them today — would make the biggest difference for me?” The Pareto Principle (also called the 80/20 Rule) states that 80% of our outcomes comes from 20% of our efforts. Choosing the right place to focus our efforts matters more than we oftentimes think.

2. What is the task’s value or ROI?

To be truly successful, everything that we do must have a value attached to it. While “value” is not always cut and dry, it should be fairly obvious as to which behaviors will predictably provide the biggest benefits.

3. Is it related to your goals?

Goal setting is a critical element in moving the needle and getting more done. Any action that advances your primary goals should be prioritized over those that don’t, assuming that we’re not talking about anything urgent and important.

4. Is it a task that you’ve been thinking about for some time?

Odds are that, the longer you’ve been thinking about something, your mind is telling you that it’s important enough to make this list.

5. Have you been putting it off for too long?

Some of the MITs are the things that we push off the longest. Maybe they’re a bit challenging. Or risky. Something that will push us outside our comfort zones. If you’ve been delaying for these reasons, it’s time to jump in.

6. Is it a task that will free you up to work on your real MITs?

Perhaps the work itself is not super important but can open the way for you to do the most important work. Example: delegating a small project that will help clear your calendar for critical tasks that you couldn’t manage to get to.

Keep in mind that MITs are not things that are most urgent or whatever tempts you in your inbox or chat. We will discuss how to handle those soon. Now that you have your MITs, set an artificial deadline for completing them. If you set a goal, for example, to have all of them done by 10 a.m., you’ll be more focused and complete the day’s most important tasks more quickly than you otherwise would. Then you’ll have the rest of the day to handle anything else that comes up.

Once you’ve put your plan in place, it becomes much easier to say “no” to off-task activities and disruptions, to be present for those who need your prompt input and guidance, and to roll with the punches whenever and however they come.

Remember, you only have so much time and energy each day to get things done. Look through your to-do list right now, and you’ll find that some items are really important, while some aren’t. To be fully impactful, your focus needs to be on completing the tasks that will make the biggest difference first before spending time and energy on anything else.

In closing, I hope you and yours are staying safe during these unusual times and that your business is prospering. As always, don’t hesitate to let me know how we can serve you better.

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)
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Author of The Real Business 101: Lessons From the Trenches
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