August 2021 Newsletter

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New South News

Dear Friends,

As I write this in late August the economy it’s still doing very well, and the construction economy is doing even better. Most companies involved in construction in any shape or form are struggling to find enough qualified people. Most workers know it is a sellers’ market and we are constantly being faced with not being able to find enough people to staff our open positions. We are not alone in this. I’m hearing it from everyone. It’s even worse here in the south because the economy here is hotter than most other parts of the country. Unemployment in South Carolina ratcheted down to 4.3% last week, back to pre-pandemic levels.

Mind you, I’m not complaining as these are what I like to call “high class problems”. Our second quarter was up 53% versus last year and when you take out product inflation that is still over 30% nominal growth. I hear we are not alone.

The strong construction market continues to result in a lot of price increases. See below for the latest information on pricing for our main products.

The wire mesh reinforcing market remains volatile. One leading wire mesh manufacturer announced a price increase on August 13th, 2021. Pricing increased by $40.00/ton across all mesh building products. Extremely high demand, little to no sitting inventory, and the increase in wire rod prices are driving these price increases. Which products to produce and corresponding lead times are now being determined by what raw materials are available and when. Wire mesh issues are expected to remain through the fourth quarter and into first quarter 2022.

Rebar remained flat over this time last month. Inventory issues and availability remain problematic for both mills and distributors. While scrap did drop another $20/ton from July, those decreases are not being seen downstream. Demand remains high, production backlogs remain full, and availability issues are keeping anyone from pushing back on price. There was some help towards the middle of August when some loads of import rebar hit the US market. The help did not come in the form of pricing, but did help alleviate some pent-up demand and back orders. We do not expect these import arrivals to solve all the issues, but it did inject the market with a few extra weeks’ worth of material. The added availability was welcomed by all parts of the supply chain. 

Unexpectedly, poly manufacturers announced another $0.05 per pound increase that went into effect on August 16th. This increase comes almost exactly one month after the increase pushed through in July. The latest increase works out to roughly a 5% increase over July’s numbers. Increasing raw material costs and transportation costs are mentioned as reasons for the increase. Another reason listed are the obstacles faced within the current labor market. Some manufacturers are unable to run at full production capacity due to labor shortages. Lead times are currently running at four to five weeks, with special sizes and mil gauges running out longer. 

The lumber market remains soft. There are opportunities to be found, but many distributors and brokers are still working their way through spring buys and summer inventory. We expect the lumber market to remain advantageous into the third quarter. Lead times are still running in the two-to-three-week range, but we have seen some loads ship much quicker than that when necessary. 

 Listed below are multiple other manufacturers within the construction industry that sent us price increase notices in August:

BoMetals, Inc., a manufacturer of concrete and masonry accessories, announced a price increase effective August 19th. The increase of cost in labor, utilities, and raw materials is driving the need for an increase. This price increase will not impact any orders already placed, but will be effective for all new orders placed on or after the 19th.

Another supplier of concrete accessories, OCM Inc., announced a price increase set for September 7th. The increase on raw goods and shipping container costs are driving the increase. The cost to move containers has skyrocketed. Pricing has quadrupled or more since this time last year. 

Two major manufacturers in the converted paperboard products scope announced pending price increases. Greif announced an 8.5% increase across all converted paperboard products effective with shipments on and after September 24th. Sonoco announced a minimum of an 8% increase across the same line of products. Sonoco’s increase will be effective for all shipments on and after September 10th.

On August 10th GCP Applied Technologies announced an upcoming price increase. A 5% increase on certain commercial waterproofing and air barrier products will be effective September 1, 2021. 

Materials costs continued to outstrip bid prices in the 12 months ending in July despite a recent drop in lumber and copper prices. The producer price index (PPI) for new nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of buildings—increased 1.7% from June and 4.4% year-over-year (y/y) since July 2020, while the PPI for material and service inputs to construction industries climbed 0.9% and 25.6%, respectively, the Bureau of Labor Statistics (BLS) reported on August 12.

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

Catching up with our Customers

In this month’s segment of Catching up with our Customers, we hear from Jack Godfrey, President of Greater Georgia Concrete, LLC. GGC was founded in 2013 from a restructuring of a prior concrete construction company called Middle Georgia Concrete. GGC is primarily a structural concrete construction company for the commercial and industrial sector, specializing in high end commercial, industrial, tilt-wall, and data center projects as well as a variety of hardscape projects. Learn more about Greater Georgia Concrete’s impressive past projects, the three P’s in their “P3” motto, and what differentiates GGC from the rest by reading the full Q/A here.

Featured Manufacturers

Owens Corning

Premier supplier of insulation, roofing, and fiberglass composites

Hohmann & Barnard

Provider of quality and innovative products that architects, engineers, and contractors have come to rely on since 1933


A worldwide leader in trench drain systems

Associate Profile

Brian Krogg
Operations Manager, Atlanta

This month’s associate profile is of Brian Krogg, Operations Manager at our Atlanta area (Tucker) GA branch. Brian was born in Las Vegas where he graduated from Western High School. Brian worked his way up through the ranks and knows how to repair rebar machines, fix trucks and forklifts, run a rebar shop, and run a branch. He is a huge asset for us at our busy branch in Atlanta.

Our leadership article this month is entitled, Reducing Talent Drain with Authentic Leadership, written by Mike Horne. As mentioned at the beginning of my letter, finding, and keeping talented associates is a major problem these days. This article has some great tips on how to keep those who report to you happy.

Reducing Talent Drain with Authentic Leadership

By Mike Horne

Anne, an experienced and respected colleague, thought everything was going well at work. She had regular check-ins with her manager, Doug, and despite frequent calendar shifts, Anne chalked up the frequent changes to Doug’s demanding calendar and didn’t think much of it. However, it might have been an early warning that things were amiss.

Still, Anne didn’t worry. She approached her manager warmly and with fondness. She was open with her feelings and routinely asked Doug if there was anything he needed or wanted. Doug never checked in on Anne’s customers, who were delighted with the value she contributed to their businesses.

And then, out of the blue, Doug told Anne that she was no longer part of the team, an employee at will, and to expect to receive a severance package.

Anne missed several warning signs that she worked for a manager who wasn’t matching his actions and words.

Authentic leaders serve to build trust and serve up communication with colleagues and team members openly and transparently. Authentic leaders influence others through ethical and honest relationships. Time and again, research establishes that authentic leaders engender happy employees who, in turn, bring more value to the attainment of team and organizational goals.

As a manager, Doug failed to develop a productive and meaningful partnership with Anne. Meetings between Anne and Doug often seemed more like a chore than an invitation.

A first and recurring theme in Anne and Doug’s relationship was that Doug expressed no interest in Anne as a person. He did not ask things like “How is your family?” or “How was the weekend?” In fact, Doug rarely said, “Hello.”

Authentic leaders build relationships with others through appropriate personal disclosures — for example, hobbies, sports teams and family stories. These increase connection and commonness, reminding us of the basic human need to feel valued, particularly in the trying times everyone has encountered during the global coronavirus pandemic.

Anne also should have realized that when Doug needed something, all lights flashed red, and deadlines were imminent. Planning and forethought did not rule the day, creating an uneasy urgency in the mundane tasks.

Despite frantic deadlines, Anne produced but never heard a “thank you.” If you want to know more about the power of “thank you,” you’ll discover it as a key ingredient behind the fantastic success of casual dining giant Chick-Fil-A. Affection and care cannot flourish in the absence of appreciation.

Among the greatest gifts we give each other as teammates is the ability to help others clarify their needs and wants. Doug’s response to Anne’s routine questions — “Is there anything you need from me” and “How can I help?” — always received the same response, “No, Anne, everything is great.” During a performance discussion, Anne raised her discomfort with what had become their call and response. When Anne inquired more, Doug followed with silence. Again, everything was great until it wasn’t.

Authentic leaders demonstrate their respect for others by honoring their commitments, including the treasured resources of time. When meetings shift unexpectedly, randomly and routinely, a manager and employee should explore the causes and outcomes of the situation. It might require a simple change such as changing the day of the week or the time of the meeting. For some, as with Anne and Doug, no one wants to be kept on hold, either in-person or on Zoom.

Finally, for Anne and Doug, role-formality (“I’m the boss”) and guarded communication ruled their experiences and interactions.

Authentic leaders and those aspiring to lead authentically turn up the friendly in their approaches with others. Also, they replace guarded and cautious communication with openness and transparency.

Anne and Doug’s experience underscores the need for authentic leaders and leadership to avoid the consequences of poor morale, reduced engagement and diminished productivity. Experience and research demonstrate that authentic leadership produces better outcomes than outdated and inconsequential leadership styles.

Words and actions matter in organizations, and authentic leaders are at the helm of high-performing teams and organizations.

We all want to feel appreciated, recognized and valued. Teams and organizations benefit when everyone is able to bring their best in every situation at work. Let’s be the catalysts for increasing Authentic leadership!

That’s all for this month. Until next month, I hope that your business continues to prosper and that all these price increases abate, at least somewhat.

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)

Main Office/Branch: Greenville, SC

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Author of The Real Business 101: Lessons From the Trenches.

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