December 2021 Newsletter


New South Construction Supply
New South News Header - Please load images to view newsletter properly.

Dear Friends,

First off, Merry Christmas and Happy Holidays, as well as best wishes for 2022. As usual, rather than send out Christmas cards that end up in the trash, we made a donation to the Red Cross in the name of our customers.

The last two years have been unprecedented due to the pandemic; however, construction has been a net beneficiary, especially here in the south. Many businesses and people have left denser cities and moved to our region, and it’s been great for construction. The pandemic also accelerated the adoption of ecommerce and that has created great demand for warehouses and data centers. As we are now the second largest owner of tilt up braces in the south, that’s been great for our business. This boom in business has caused a lot of our suppliers to repeatedly increase prices over the last two years. See below for the latest information on the products we distribute.

Over the last month lumber pricing has escalated weekly, and there is no indication that it will stop any time soon.  While there is are a plethora of reasons behind the recent surge in lumber prices, one major reason is the historic flooding seen in the Pacific Northwest, specifically Vancouver.  (https://www.bloomberg.com/news/articles/2021-11-30/lumber-prices-rebound-as-canadian-floods-curb-shipments). Flooding has cut off shipping routes in and out of the world’s largest producers of SPF lumber, creating a lack of finished goods.  This lack of SPF supply has caused demand surges all across the country, and when paired with the yearly seasonal decline of inbound logs to the mills, the supply vs demand = price model is in full effect. This is causing prices to skyrocket on loads available. Expectation is for lumber to go on a run similarly like we saw earlier in the year. #3 grade is almost non-existent and available loads of #2 grade dimensional lumber are being bought off the market in a matter of hours after being posted.

While not as volatile as lumber, the rebar market remains at an all-time high. Mills pushed through another $30 per ton increase on November 29th, just one month after announcing a $40 per ton increase on October 28th. While there was some initial skepticism on whether the November increase would stick, strong demand and a high number of purchases to start December quickly squashed any hopes of the increase being pulled back. Rebar mill capacity is fully booked through December and the January rolling should be fully booked before Christmas week.

Wire mesh availability continues to be tight, with lead times still running up to four months depending on gauge and sheet size. Pricing has remained fairly steady since the $80 per ton increase that was pushed through in November, but the mesh market remains on unstable ground. Increases can come quickly and often within this product scope there are always rumors of a pending price increase. As mentioned in prior newsletters, the expectation is for these issues to continue well into 2022.

Poly sheeting saw a brief uptick in the middle of the month, but seems to have settled back to where it began. While pricing has held within a few percentage points over the past few months, overall poly pricing has increased over 60% since January 2021. Winter can bring a different set of issues to the poly market but barring another major storm like we saw in Texas (the country’s largest region for resin production) last winter, we don’t foresee pricing increase that quickly in the coming months.

The monthly and year-over-year (y/y) increase in construction input costs in November exceeded the rise in contractors’ bid prices, according to BLS data posted on Tuesday. The producer price index (PPI) for material and service inputs to new nonresidential construction climbed 0.9% for the month and 22.1% y/y, while the PPI for new nonresidential building construction—a measure of the price that contractors say they would bid to build a fixed set of buildings—increased 0.3% from October and 12.4% y/y. AGC posted tables and graphs of construction PPIs.

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 highlight Welch Construction, whose office in Myrtle Beach focuses on Concrete and Masonry in the Commercial Construction industry. We interviewed Gary Ogden, who is the Myrtle Beach office’s Division Manager and who works closely with New South Construction Supply when it comes to our rebar and masonry accessory services.  Learn more about Welch Construction, Gary, the projects they’re most proud of recently, and their commitment as a Certified Service-Disabled Veteran-Owned Business by clicking here.


Featured Manufacturers

Sika/Scofield

The #1 Ranked Brand Name in Decorative Concrete Color, Texture and Performance Systems

MARSHALLTOWN

Professional quality concrete and masonry tools

Simpson Strong Tie

Connecting systems for wood, steel, masonry, and concrete


Associate Profile

Nick Robinson
Manager in Training (MIT) Atlanta

Our associate spotlight this month is of Nick Robinson, a Manager in Training (MIT) at our Atlanta branch. Nick was born in Columbia, SC and graduated from Broad Run High School in Ashburn, VA. He received his bachelor’s degree in criminal justice from the University of South Carolina. He started with us in May 2021 as an MIT at Columbia location before transferring to Atlanta. Nick lived in Mexico City as well as multiple other states due to my father’s job, so he is also fluent in Spanish. He is single and enjoys hunting, spending time with his family, and taking the boat out on the lake.


Our management article this month is, Seven Federal Tax Areas Businesses Should Be Focusing on During Year End Planning. I know it’s late in the year, but you may want to scan this to ensure you’re taking advantage of as many tax breaks as possible.

Seven Federal Tax Areas Businesses Should Be Focusing On During Year End Planning
by Lynn Mucenski Keck

While all of us are busy during the holiday season, tax professionals’ heads are spinning more than usual on how best to approach year end planning. With the 2021 calendar year ending in less than 30 days, coupled with tax legislation that could (or could not) be enacted, a myriad of options exist when trying to position businesses and their owners to optimize cash. To try to make the planning a little less foggy, it will be important to evaluate the existing federal tax law while still considering the significant changes under the proposed Build Back Better Plan. Either way, the approved tax law changes for 2021 and pending tax law changes for 2022 are poised to cause most individuals to send more cash to the federal government.

1. Deferred 2020 Employer Social Security Payments are Due: It has been so long ago that businesses may have forgotten that they deferred their employer portion of social security in 2020. As part of the CARES act, employers were permitted to defer deposits of the employer portion of Social Security due between March 27, 2020 through December 31, 2020. However, the law only provided a deferral, and half of the deferred payment is due as of December 31, 2021, with the other half coming due on December 31, 2022.

The IRS has taken recent action to inform the public that they will not tolerate late payments on the deferral. The payment of 50% of the deferral is due regardless of whether a business received an IRS notice requesting payment. It’s clear through the issuance of OTMA 2021-07 that the IRS expects to enforce stiff penalties if the December 31st deadline is missed. The IRS memorandum states that if any portion of the deposit is not made by the applicable date, whether December 31, 2021 or December 31, 2022, the deferral will be deemed completely invalid and all penalties will be assessed using the original due date for the employer portion of Social Security.

It will be important to ensure that businesses have cash to make these payments, but that they also have properly communicated with their payroll providers to submit the amounts due in a timely manner. Any such request to the payroll company to ensure payment should be in the form of written communication. Lastly, the amount paid should be clearly communicated to your tax advisor so it can be properly recorded on the business tax return.

2. Employee Retention Credit: Many businesses were shocked and disappointed to learn that the Infrastructure Bill eliminated the ability to claim the 2021 fourth quarter employee retention credit. Even worse, some businesses were claiming the ERC in the start of the fourth quarter as the change in law wasn’t passed until November 15thNotice 2021-65 was issued by the IRS in early December and details the alternatives businesses can consider in order to avoid penalties for claiming the ERC in the fourth quarter.

If an employer reduced their federal payroll deposits in relation to the expectation of the fourth quarter employee retention credit, they must deposit those taxes on or before December 20, 2021 in order to receive penalty relief.

Alternatively, if an employer claimed an advance payment for the ERC in the fourth quarter, Notice 2021-65 offers penalty relief provided the employers who received such advanced payments repay the payroll taxes by the due date of their applicable employment tax return that includes the fourth quarter of 2021. Generally, the fourth quarter Form 941 is due no later than January 31, 2022.

Significant penalties can be assessed if employment taxes are not paid on time. Therefore, it will be important for businesses to understand the amount that is owed to the federal government in relation to any 2021 fourth quarter ERC claimed and ensure timely payment. In addition, any other employee retention credits claimed throughout the 2021 tax year should be reported to your tax advisor to ensure the proper reduction to salaries and wages on the 2021 federal business tax return.

3. Net Operating Rules: Think that generating a net operating loss carryforward in 2020 means you won’t have to pay any cash taxes in 2021? Not so fast. As a result of lost business due to the pandemic, PPP debt forgiveness not being taxable, and PPP expenses being deductible, net operating losses were prominent in 2020. However, the rules surrounding how the net operating loss can be utilized has changed for the 2021 taxable year.

Any net operating loss generated in 2018, 2019, or 2020 that is being carried forward into the 2021 taxable year will be limited to 80% of taxable income. However, net operating losses being carried forward from before 2018 will not be limited when offsetting taxable income.

For example, assume a business has taxable income of $60,0000 for the 2021 calendar year. The business generated a net operating loss carryforward of $50,000 from 2017, and a net operating loss carryforward of 75,000 from 2020. Even though the 2017 net operating loss is allowed to offset the full amount of taxable income, the remaining net operating loss carryforward from 2020 will be limited to 80% of the taxable income remaining, or $8,000 (60,000-50,000 x 80%).

As a result of the legislation, some type of cash payment will have to be made to the IRS as the net operating loss carryforwards are limited to 80% of taxable income. The limitations on net operating losses could also result in additional state income tax payments having to be made.

Build Back Better Plan Interplay: The current bill passed by the House does not have any changes being made to federal net operating losses. In other words, the 80% limitation is here to stay. Planning opportunities would include working with your tax advisors to match expenses closely with taxable income streams.
An important proposal buried in the Build Back Better Plan is that net operating losses will no longer be allowed to offset net investment income tax of 3.8%. With the proposed expansion of the net investment income tax to include trade or business income, taxpayers with a net operating loss may be very surprised that the net investment income tax is still being assessed. Take the following example:


NIIT Expansion & NOL Example
THE BONADIO GROUP

The example illustrates the impact of the expansion of the net investment income tax to S Corporation ordinary income and not being able to utilize a net operating loss before applying the net investment income tax under the Build Back Better Plan. In this example, the taxpayer would see a significant impact on cash taxes due between the current legislation and proposed legislation.

4. Excess Business Loss Limitation Rules Are Back With a Vengeance: Many might have forgotten about the TCJA law that limited the ability to deduct business losses at the individual level. The new law was originally enacted as part of the TCJA and was supposed to apply to the 2018, 2019, and 2020 taxable years but was quickly lifted as part of the CARES Act pandemic assistance program. The ability to deduct all businesses losses, with no limitation for taxable years between 2018 through 2020, allowed taxpayers to create net operating losses and potentially carry them back five years or carry them forward indefinitely. The deferral of the excess business loss rules, coupled with modified net operating loss rules, provided taxpayers with a great cash benefit during the pandemic (even if we are still waiting to receive the refunds from the IRS).

However, for the 2021 taxable year the excess business loss limitation rule not only applies but a technical correction related to the rule might cause some taxpayers to generate more taxable income than expected. In general, the excess business loss limitation rule requires a taxpayer to total all their business income and losses, including their Schedule C and pass-through entity income and losses, and limits the ability to deduct losses in excess of $524,000 if married filing joint ($262,000 if single) for the 2021 taxable year. To be clear, even if you have generated $2,524,000 of net business loss for the year, only $524,000 will be allowed as a deduction. The remaining $2,000,000 is treated as a net operating loss for the taxable year, with an indefinite carryforward, and only will offset 80% of taxable income going forward.

If that isn’t bad enough, the technical correction provided in the CARES Act clarified that W-2 wages cannot be included when totaling your business losses. Adding to the pervious example, if a taxpayer’s spouse makes $750,000 in W-2 wages, and the total business loss was $2,524,000, many were taking the position that the wages of $750,000 would be included when evaluating the overall business loss. In other words, prior to the technical correction, the business loss subject to the limitation in our example would be $1,774,000 (2,524,000-750,000), the limitation would be $524,000, and a net operating loss carryforward of $1,220,000 would be generated. As a result, no taxable income would remain.

Unfortunately, Congress felt otherwise. Instead, the technical correction is explicit that the wages are not allowed to offset business losses. The taxpayer would reflect $750,000 of wage income, be limited to $524,000 of business losses, and create taxable income of $226,000. Don’t bother rereading, you are correct! Even though the taxpayer generated $2,524,000 of business losses, which is much greater than their overall income, they would have taxable income. The net operating loss carryforward to the 2022 taxable year would be $2,000,000 (2,524,000-524,000).

It’s the beginning of December, how could we possibly combat this issue? For S Corporation shareholders, who are required to pay reasonable compensation, this could develop into a taxable income situation quickly. Make sure to review the reasonable compensation arrangement for 2021 and going forward.

An alternative planning strategy to limit the amount of excess business loss limitation, would be to defer business expenses into the 2022 taxable year, as opposed to 2021. For example, consider the timing of the bonus pay outs. Alternatively, are there income items that could be escalated into 2021? For example, including advanced payments all in the year received, with no deferral. Also, explore method of accounting changes with your tax advisor. Depending on the methods used, there may be a way to better manage taxable income. The best part about an automatic change in method of accounting – they don’t have to be completed until the extended due date of the tax return.

Build Back Better Plan Interplay: Under the existing law the excess business loss limitation rules no longer apply to taxable years beginning after December 31, 2027. The Build Back Better Plan would make the loss limitation permanent.

As noted earlier, the expansion of the net investment income tax to include trade or business income in 2022, could be subjecting a variety of pass-through entity business owners to an additional 3.8% tax. For example, S Corporation shareholders filing a married filing joint return with an AGI above $500,000 would be assessed the additional 3.8% tax on their ordinary income that flows through from the S Corporation. Similarly, real estate partners could be assessed an additional 3.8% on rental income. The desire to drive income into 2021 and push expenses to 2022 is generally a good planning strategy to work through excess business loss limitation rules and mitigate the potential expansion of the net investment income tax in 2022 included in the Build Back Better Plan.

In addition, deferral of expenses to 2022 could decrease a taxpayers AGI dollar-for-dollar. Alternatively, if the excess business loss limitation is captured as a NOL in 2021 and brought into the 2022 taxable year, the carryforward may be limited as the NOL can only offset 80% of taxable income. There is also a potential 5% surcharge for AGI income over $10 million (or 8% for AGI over $25 million) included in the Build Back Better Plan, which also could be beneficial for pushing expense deductions to 2021.

5. Interest Expense Limitation: If you are reading this and don’t know what an interest expense limitation is, keep reading. It is anticipated that more businesses and individuals will be subject to the business interest expense limitation rules going forward.

Under the CARES Act, favorable adjustments were made to the interest expense limitation rules for the 2019 and 2020 taxable years in hopes of allowing businesses to have more cash to help them survive the pandemic. During the 2020 taxable year, an interest expense deduction was allowed for up to 50% of adjusted taxable income. In addition, the 2020 adjusted taxable income used in this calculation was the greater of the adjusted taxable income from 2019 or 2020 taxable year.

The favorable benefits provided in the CARES Act are removed for the 2021 taxable year. In other words, tentative taxable income must be calculated using only the 2021 taxable year information (there is no longer a choice between years), and the percentage applied to tentative taxable income decreases from 50% to 30%. The same scenario between 2020 and 2021 could generate a significantly different interest deduction based on the change in tax law.


2020 vs 2021 Interest Expense Limitation Example
THE BONADIO GROUP

The takeaway? If you have significant interest expense in your business, you should be asking your tax advisor if the full deduction will be allowed in 2021. Are you losing the ability to deduct the total business interest expense, and potentially creating taxable income? If so, can you fall under the small business exemption or real estate trade or business exception? If an interest expense limitation is expected, are there planning opportunities to increase tentative taxable income?

Another 2021 planning consideration when dealing with the business interest expense limitation is that 2021 is the last taxable year where depreciation and amortization can be added back when determining adjusted taxable income. In other words, if depreciation and amortization are large tax items for your business, the adjusted taxable income of 2022 is most likely going to be significantly lower. If a business is subject to the interest expense limitation, they should look to escalate depreciation and amortization into 2021. For example, is there property that is subject to bonus depreciation that can be placed in service before year end?  If the same property is placed in service in 2022, a taxpayer will not be able to utilize the bonus depreciation when calculating adjusted taxable income which will result in a lower deduction for allowed business interest expense.

Build Back Better Plan Interplay: The most recent bill does not significantly change the interest expense limitation rules but does suggest that the limitation no longer takes place at the business level (i.e. S Corporation of partnership level), but instead would be assessed at the individual level. While this created a sigh of relief for the tax professionals filing business returns, individual tax compliance could become much more burdensome.

6. Disposition of Property or Stock: If businesses or individuals are considering dispositions with significant gain, closing the deal in 2021 may lead to significant cash savings. Under the current law, capital gains will be subject to a maximum 20% tax rate or an ordinary income tax rate of 37%, and the sale of underlying business assets will not trigger net investment income tax.

Build Back Better Plan Interplay: If the Build Back Better Plan is passedtriggering a large gain in 2022 could significantly impact the amount of federal taxes paid. While the maximum capital gains rate remains at 20%, the 3.8% net investment income tax would be expanded under the plan to include selling active interests in partnerships or S Corporations. If you are reading this and thinking an increase of around 4% is not the end of the world, don’t’ forget about the proposed surcharge tax. If the gain causes a taxpayer’s adjusted gross income to be above $10,000,000, an additional 5% surcharge will be applied. If the adjusted gross income is above $25,000,000 the surcharge rises to 8%. An important reminder is that the tax surcharge is based on adjusted gross income and not taxable income. In other words, itemized deductions, including charitable contributions, are not going to help avoid the surcharge. All together this could result in additional tax spanning from 3.8% all the way to 11.8% depending on the size of the gain. If a taxpayer is looking to dispose of stock or property that will trigger a significant gain, and the Build Back Better Plan does pass, serious consideration should be considered for installment sales.

Lastly, investors in cryptocurrency have a significant planning opportunity ending as of December 31, 2021. As part of the Infrastructure Bill that was signed into law, the disposition of cryptocurrency, which is treated as property for federal income tax purposes, will fall under the wash-sale rules as of 1/1/2022. Therefore, if you have significant losses in a digital currency and would like to realize the loss without having to wait 30 days before reinvesting, the transaction should be completed before the end of the year.

7. Charitable Contributions: The concern over the survival of public charities during the pandemic was also considered in the CARES Act. Individuals who make qualified charitable contributions and itemize their deductions, can elect to increase the amount of their deduction to 100% of their AGI, as opposed to the traditional 60%. Cash contributions made either to supporting organizations or to establish or maintain a donor advised fund, do not qualify. In addition, cash contributions to private foundations and most cash contributions to charitable remainder trusts also do not qualify.

This increased limitation, from 60% to 100% of AGI, was allowed for the 2020 and 2021 taxable year and will revert back to 60% in 2022. Therefore, if pondering when to make significant cash contributions to public charities, 2021 could allow an increased deduction, as well as the ability to keep more cash in the bank.

Is your head spinning? Mine is. Keep in mind these are only seven areas that I chose to highlight regarding federal tax planning. State income tax planning (including evaluating the impact of remote work arrangements and the potential to optimize pass through entity tax arrangements) can make it even more complicated. What can I say? There is a reason you pay your tax accountants well. At this point, it is a good time to shoot your tax advisor an email and touch base. Heck, even ask to meet at a restaurant for lunch or dinner. The ability to deduct 100% of food and beverages purchases from restaurants for business purposes is in effect for 2021 and 2022.

On a side note, happy holidays to all. While I know this time of year can be hectic please make sure you take some time to reflect on the last 12 months. While we know that the holidays won’t be perfect, it is my belief that we are making progress and my New Year’s hope is that we will continue to do so. Wishing you and yours a peaceful holiday season with much joy and laughter.


That’s it for this year. Again, best wishes for Christmas and the holiday season. I hope you get to rest up for 2022 as it looks like the New Year will be another blockbuster year!

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)
jim.sobeck@newsouthsupply.com

Main Office/Branch: Greenville, SC

Other Branches in:

Columbia | Charleston | Myrtle Beach | Hilton Head | Greensboro | Raleigh | Charlotte | Atlanta | Jacksonville

Connect with us: Instagram I Facebook I LinkedIn I Twitter | YouTube

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

To get your copy see below:

For Smashwords (eBook version for Kindle, iPad, Nook) click here
For direct link to Amazon site (Kindle and print version) click here

November 2021 Newsletter


>> New South eNews
New South Construction Supply
New South News Header - Please load images to view newsletter properly.

New South News

Dear Friends,

First and foremost, I want to wish our customers and suppliers a Happy Thanksgiving. I hope you and yours will be able to enjoy the holiday in pre-pandemic fashion this year. We are always thankful for your business and support, but even more so as the year winds down and the holiday season ensues.

Our biggest news is on November 1, we closed on the acquisition of Increte of North Florida (IONF) in Jacksonville, Florida, resulting in our tenth branch and first branch in Florida. IONF was founded by Grant Denny, Sr. 17 years ago, and Grant is staying on with us in a sales position. Their main market is Road & Bridge contractors and they also rent concrete forms. We have already rented some of their forms to customers our ours in the Lowcountry of South Carolina. We’re going to build a rebar shop there and also start a tilt up market at this newest branch. We’re very excited to add their talented team to ours! Read the full press release from the official announcement here.

The industry continues its breakneck pace with no indication of slowing down moving into the holiday season. With both the commercial and residential space booming, elevated demand levels continue to keep pricing high and supply chains strained.

Our tilt up business is mostly booked up until June of next year. We keep landing jobs and ordering more braces, but they have been hard to get lately, too. If you have any tilt jobs coming up in 2022, please get with us ASAP and we’ll do our best to accommodate you as we have a few gaps in our schedule and we may be able to get more braces after the first of the year.

We still are trying to fill five positions. Visit https://www.newsouthsupply.com/careers/ to view open positions, and if you know of someone who can fill one (or more) of these positions, we will gladly pay a $2,000 referral fee if we hire someone you recommend to us.

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

Wire Mesh continues this year’s historic climb, and another price increase was pushed through on November 10th, 2021. An $80 per ton increase went into effect on all orders placed after November 10th and impacted all building mesh products. Mesh prices have more than doubled since November of 2020. With continued increasing scrap and wire rod pricing, expectations are for mesh to continue to rise well in to the first quarter of next year. Lead times on newly placed orders are still running three to four months before delivery.

Rebar also saw an increase since the last newsletter. On the evening of October 28th, one major mill announced a $40 per ton increase effective immediately on all new orders placed. By noon the next morning, two more mills in the Southeast followed and similarly announced a $40 per ton increase. The increase appears to have scared buyers into beefing up their inventories, as shortly after the price announcement November and December rebar rollings were quickly booked up. There was some initial thought that the increase would not stick, but that speculation quickly subsided, and buyers scrambled to find coverage for November and December needs.

Polyethylene sheeting remained fairly stable through November. Pricing may vary a few dollars per roll depending on the manufacturer, but most prices fell within the same variance range seen the past couple of months. There is a similar pattern on lead times. Typical size and mil needs are being fulfilled and delivered in the three-to-four-week time frame. This is much improved from this time last year, but certainly not where it was pre-pandemic.

In the past few months lumber has rapidly bottomed out, hovered at the bottom, and then had a quick but short bounce. October brought a quick bounce and prices increased almost every week during the month. Buyers remained skeptical of the market and inbound orders to the mills slacked as a result through the month. As a consequence, mills ceased the increases and flattened out the pricing. While current pricing is still more expensive than at the beginning of the month, the high-water mark has leveled and pricing has been fairly stable throughout November. With lumber demand levels flat and winter approaching, many distributors are beginning to reduce sitting inventory to reflect the usual seasonal slowdown while still closely watching the market should any large movement take place in the near future.

Contractors’ bid prices soared in October, though the y/y (year over year) increase in construction input costs exceeded the rise in bid prices, according to BLS data posted on Tuesday. The producer price index (PPI) for new nonresidential building construction—a measure of the price that contractors say they would bid to build a fixed set of buildings—jumped 7.1% from September and 12.6% y/y, while the PPI for material and service inputs to new nonresidential construction climbed 1.3% for the month and 21.1% y/y. AGC posted tables and graphs of construction PPIs.
 
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 highlight E&M Concrete, a full-service concrete contractor that is built on a reputation for providing quality craftsmanship at affordable prices. Located in Fuquay-Varina, North Carolina, the company is focused on helping customers get the job done effectively, no matter how big or small, and most importantly, with superior detail and craftsmanship. Discover more about their business, the areas they serve, how they help the community, and more by reading the full Q&A found here.
 


Featured Manufacturers

 

Hohmann & Barnard

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

 

Zurn

A worldwide leader in trench drain systems

https://gallery.mailchimp.com/f50bf108ac23c82de92d1c6ba/images/f173c96c-5b2b-4524-a834-09580b71b72e.jpg

Simpson Strong Tie

Connecting systems for wood, steel, masonry, and concrete


 

 


Associate Profile

Brian Hartis
Fabricated Rebar Category Manager

Our associate spotlight this month is of Brian Hartis, Category Manager for Fabricated Rebar. Brian was born in Charlotte and graduated from East Mecklenburg High School before going on to Central Piedmont Community College. Before joining us he was employed by Steelco from 1994 – 2013 and Cochrane Steel 2013 – 2021. He is so into rebar that his license plate says, “Mr. Rebar”. Now that’s commitment to your work! His hobbies include hunting, fishing, NASCAR Racing, and NHRA Drag Racing. Brian joined us last August and his prior experience allowed him to hit the ground running.

 


Our leadership article this month is one the Upstate Business Journal published this month on Employee Recognition on a Budget. As the Great Resignation is underway some of these tips may help you with employee retention.
 


 

In closing, again, Happy Thanksgiving. Best wishes for the upcoming holiday season.
 

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)
jim.sobeck@newsouthsupply.com

Main Office/Branch: Greenville, SC

Other Branches in:

Columbia | Charleston | Myrtle Beach | Hilton Head | Greensboro | Raleigh | Charlotte | Atlanta | Jacksonville

Connect with us: Instagram I Facebook I LinkedIn I Twitter | YouTube

Author of The Real Business 101: Lessons From the Trenches. To get your copy see below:

For Smashwords (eBook version for Kindle, iPad, Nook) click here
For direct link to Amazon site (Kindle and print version) click here

October 2021 Newsletter


>> New South eNews
New South Construction Supply
New South News Header - Please load images to view newsletter properly.

New South News

Dear Friends,

Autumn is here and construction is still booming. The hottest areas in our market are residential construction, warehouses and data centers. We continue to land multiple tilt up jobs across the southeast along with a lot of traditional construction projects as well. To be able to service all of these jobs we have nineteen openings posted on our website careers page. If you know of anyone who can fill one of these openings, we will gladly pay a $2000 referral fee if we hire someone you recommend to us.

Interest rates are still low, and the price increases we had been seeing are abating in many cases. See below for detailed pricing information on the main products we sell.

There were some movements within the commodity item markets in October as multiple items saw pricing changes.

Lumber continues its rebound from the market low seen over the summer and early fall. Mills and brokers are both expressing that material availability is tightening and pricing continues to slowly tick up as each week passes. These increases are not coming at the same velocity we saw last summer and earlier this year, but it does show the market has hit bottom and has bounced back up. Lead times are starting to stretch out a little more, with lead times running two to three weeks depending on the grade and size need.

Wire mesh has seen another price increase pushed through in October. A price increase of fifty dollars per ton was announced the second week of October. Supply chain and production issues continue for the wire mesh industry. The world-wide wire rod shortage remains and producers just cannot manufacturer enough or quickly enough to curb demand and backorders. Lead times from the mills are still given in terms of months and not weeks, with four to five months being a standard reply from the mills. This issue is expected to remain well into 2022 and we expect wire mesh to continue to rise throughout that time. This is the product where future job scheduling, planning, and purchasing is the most vital.

 Rebar pricing, for the time being, is still flat. The market has seen a nice reprieve in volatility since July, but that consistency may be challenged over the coming months. Scrap rebar is projected to post up later this month and buyers are closely watching how the mills plan to react. Winter typically makes scrap collection more difficult, which in turn lowers availability and increases pricing and this year looks to be no different. Overseas demand remains extremely high for US scrap and the overall scrap market is very bullish moving into winter. Even with rebar availability continuing to improve, most are expecting to see an increase from the mills in the coming weeks.

Polyethylene sheeting has not seen much movement since the increase that was took place in mid-September. Pricing remains fairly consistent across the market, with some variance on availability and lead time depending on size and quantity needs. Lead times are running right in the three-to-four-week window for most standard sizes.

Unusually, materials costs and contractors’ bid prices both declined from August to September, but the gap between the two prices remained wide over the latest 12 months. 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—dipped by 0.1% from August but increased 5.0% year-over-year (y/y) since September 2020, while the PPI for material and service inputs to new nonresidential construction slipped 0.3% for the month but soared 19.7% y/y, the Bureau of Labor Statistics (BLS) reported on October 14.

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 highlight Rinnovare, a Post Tension Construction company that is based on service and giving. Rinnovare offers turnkey Post Tension concrete packages for multi-family projects, and their main focus is garden-style apartments along with some light podium work. Discover more about their business, how they are different from their competition, and what projects they’re currently working on by reading the full Q&A here.


Featured Manufacturers

 

Owens Corning

Premier supplier of insulation, roofing, and fiberglass composites

Access Tile

The ultimate solution in detectable warning systems

SpecChem

Makers of Chemicals and Aggregates for the Concrete Industry


 


Associate Profile

Hal Dowhower
Fiberglass Rebar and ICF (Insulated Concrete Forms) Category Manager

Our associate spotlight this month is of Hal Dowhower, our Fiberglass Rebar and ICF (Insulated Concrete Forms) Category Manager. Hal was born in North Platte, Nebraska and is a graduate of St. Johns Military School in Salina, Kansas. Prior to joining us, he was Owner of Dowhower Building Supply from 1986-2000, then he was in Outside Sales for Hawkeye Building Supply from 2005-2017, and then he was in Outside Sales for Liteform Technologies from 2017-2021. He and his wife Diana have three children and eight grandchildren, and his hobbies include woodworking, digital photography, drone photography, fly fishing and traveling. Welcome to the team, Hal!
 


Our Leadership Article this month is, Apology 101: Make Things Right. Many times, half-hearted apologies just make things worse. Here are tips on how to apologize properly.

Apology 101: Make Things Right

By John Baladani

You know you made the right decision. And the decision was well made. The problem is the results were not.

So now you’re on the hot seat. People are clamoring for your head. What do you do?

Apologize!

Every good apology has three operative elements: acknowledgment, acceptance and amends.

  1. Acknowledge the wrong. First, say you are sorry for what occurred. People may be suffering. Acknowledge the pain and the loss. Make it known you understand their pain. Demonstrate empathy by showing compassion.
     
  2. Accept the consequences. Shoulder the blame. Make it known that you hold yourself accountable and will work to rectify the situation. In the wake of the failed invasion in the Bay of Pigs, President John Kennedy, just four months in office, said, “Victory has a hundred fathers, and defeat is an orphan.”
     
  3. Make amends. People are disappointed, frustrated, and maybe even disillusioned. They don’t want speeches; they want actions. Talk about what you and your team will do immediately. Get working on the problems and take corrective measures.

No excuses!

Keep in mind an operative principle of apologies: “It’s not about you. It’s about them.” A leader who discusses everything he did to avoid the mistake may tell the truth, but those suffering do not want to hear it. Instead, they want to know that the person responsible for the error is focused on making things better.

Good apologies all contain one key element: no finger-pointing. A senior leader often makes an apology, even when she may not be directly responsible. But as the top person, it becomes your job to own the situation. So you don’t point fingers. Instead, you swallow your pride, and you take the heat.

Anyone can make excuses except those in charge. “Never ruin a good apology with an excuse,” said Ben Franklin.  You can provide the backstory, but when you do make it clear that you are not excusing yourself, you are merely giving context. Own the decision and its consequences.

Doing this will make people recognize that you have something we all want: a backbone. By making amends and correcting the situation, you create a path forward for your team, your organization, and maybe your reputation.

Move forward

No leader makes the right calls at the right time. But great leaders make things right when things go wrong. As Winston Churchill once quipped, “Success in life is the ability to move from one mistake to another without losing enthusiasm.” Defeat is not the end unless you let it define you.

There are, of course, mistakes that require the leader to step down. But, in the grand scheme of things, those occasions are rare. When they involve moral transgression, removal from the position is a good thing. When they include mistakes in judgment, regard them as “teachable moments.”

Apologies are but the first step toward creating a better future. Forget this at your peril.
 


That’s all for this month. I hope we all enjoy nice weather for the next few months and that we all end this year on a high note.

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)
jim.sobeck@newsouthsupply.com

Main Office/Branch: Greenville, SC

Other Branches in:

Columbia | Charleston | Myrtle Beach | Hilton Head | Greensboro | Raleigh | Charlotte | Atlanta

Connect with us: Instagram I Facebook I LinkedIn I Twitter | YouTube

Author of The Real Business 101: Lessons From the Trenches. To get your copy see below:

For Smashwords (eBook version for Kindle, iPad, Nook) click here
For direct link to Amazon site (Kindle and print version) click here

September 2021 Newsletter


>> New South eNews
New South Construction Supply
New South News Header - Please load images to view newsletter properly.

New South News

Dear Friends,

Last weekend we celebrated our 40th anniversary on Hilton Head Island with our associates, their plus one’s and many suppliers. Less than five percent of companies make it to 40 years, so we were glad to be able to get together and celebrate this significant milestone. A special thanks to our customers and suppliers, without whom this would never have been possible.


As I write this letter in late September, the overall economy in general, and the construction economy, in particular, continues to do well. There is more inflation than I would like to see, but it isn't really affecting the stock market or construction starts, at least not yet. As the old saying goes, “While the music is playing, we're going to continue to dance.”

Here at New South, our business is currently on fire. Our second quarter was 52 percent higher than the second quarter of last year. We are currently supplying or have in backlog over 10 million square feet of tilt-up construction jobs, our residential business is booming, and we just landed the largest bridge job in our history. The shortages of several of the key products we sell is largely over, except for concrete reinforcing mesh. There is still a worldwide shortage of the wire rod needed to manufacture this product. If you need wire mesh for upcoming jobs, I suggest you order it the second you sign the contract.

There is a lot more coming New South’s way before the end of the year is over, and we look forward to sharing more with you via this email newsletter and on our social media channels – particularly on LinkedIn, Facebook and Instagram

Read below for a closer look at pricing trends for our key products:

As summer shifts to fall, the construction industry continues to run at full capacity. New jobs continue to break dirt and backlogs for 2022 remain strong. While there were not the huge pricing swings seen in prior months, there were some commodity items that saw pricing movement.

Wire mesh reinforcing continues its steady climb up in pricing. The wire rod shortage remains a significant impact on production and lead times for finished products. Demand remains extremely high and lead times are currently running 12 – 16 weeks. With consumer demand high and availability low, the wire mesh mills pushed out a $40.00 per ton increase on September 15th.  This increase comes almost exactly one month after a $40.00 per ton increase was announced August 13th. Wire rod availability projects to remain an issue for the foreseeable future, so the expectation is for wire mesh to continue to rise through the remainder of the year and into 2022.

While mesh continues to rise, rebar has stayed stable in comparison. While scrap metal pricing has continued to decrease slightly over the past few months, demand has remained at a high enough level to keep the finished goods pricing from following the dropping scrap prices. Another factor we continue to monitor is the increasing amount of import rebar hitting the US market. While import pricing currently has little to no advantage over domestic pricing, the instant impact of availability provided by the increased import supply, is helping to decrease lead times and help build domestic inventory at the mills. For now, rebar looks to remain stable moving into October. 

Polyethylene saw another small increase come through in September. This increase went into effect September 13th and came just four weeks after an increase of the same size was implemented in August. The increase in costs of raw materials, resin, labor, and transportation are all listed as the reasons for the additional increase. Two increases in such a short time period does bring concern of another price run like we saw earlier in the year. If the market panics and begins to place large amounts of purchase orders in excess of historical demands and current production capacity, we could see a pinch point in the supply chain that causes lead times to increase dramatically. 

Lumber pricing appears to have hit the bottom and are beginning to rise back up. After the rapid decline of lumber pricing over the past few months, the solidification and slight rise in pricing has given the mills and brokers a chance to catch their breath. Availability remains strong with the typical sizes and grades able to ship out within two weeks. Expectations are for pricing to continue to slowly rise over the next few weeks. 

Materials costs continued to outstrip bid prices in the 12 months ending in August despite a recent drop in lumber and fuel 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 0.3% from July and 5.0% year-over-year (y/y) since August 2020, while the PPI for material and service inputs to construction industries climbed 20.6% y/y despite a decline of 1.7% for the month, the Bureau of Labor Statistics (BLS) reported on September 10.

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 highlight Frank L. Blum Construction Co., a general contracting company who provides a range of services to multiple diverse markets such as healthcare, higher education, senior care facilities, and corporate interiors to name a few. Beginning in 1923 in Winston-Salem, NC, Frank L. Blum Construction Co. has grown and expanded into four more locations across the state including Asheville, Charlotte, Greensboro, and Raleigh. Learn more about their exceptional past and present projects, their highly respectable core values that shape their day-to-day business, and their industry prediction for 2022 by reading the full Q&A here.


Featured Manufacturers

 

Owens Corning

Premier supplier of insulation, roofing, and fiberglass composites

Sika/Scofield

The #1 Ranked Brand Name in Decorative Concrete Color, Texture and Performance Systems

Husqvarna

A Leader in Concrete Cutting Tools and Accessories


 


Associate Profile

Alex "Ferny" Villa
Manager in Training, Charlotte

Our associate spotlight this month is of Alex “Ferny” Villa, a manager in training at our Charlotte branch. Ferny was born in Durango, Mexico, graduated from Trinity High School in North Carolina and received his political science degree from UNC Charlotte. Prior to joining us in April, he was with two equipment rental companies. He has big smile and a great attitude and has already become a major asset at our Charlotte branch. Fluent in his native Spanish, we are excited he can communicate with our valued Hispanic customers more effectively. In his free time, he enjoys traveling, grilling, ATV riding, and spending time with family and friends.


Our Leadership article this month is, Momentum: How a Series of Small Wins Maximizes the Flywheel Effect. If you aren’t familiar with “The Flywheel Effect”, it was popularized by the celebrated business book author, Jim Collins. He talks about how it takes a lot of energy to get a flywheel to move, but when it does, get out of the way. I know you’ll enjoy this article on how to get the flywheel moving in your business.

Momentum: How a Series of Small Wins Maximizes the Flywheel Effect

By Dan Rockwell

“Big things happen because you do a bunch of little things supremely well that compound over time.” Jim Collins

“One little thing doesn’t make a difference. But ten little things do make a difference.” Swen Nater

A series of small wins makes:

  1. Hard jobs easier.

  2. Quitting unlikely.

  3. Problems less troubling.

  4. Environments brighter.

  5. Big wins attainable.

Momentum – how to leverage the flywheel:

#1. Develop people.

Lousy leaders press for results without developing people.

Behaviors are targets too. Describe, honor, and celebrate behaviors that create winning environments.

If it’s only about the numbers, people are tools.

#2. ‘Where’ comes before ‘how’.

Describe where you choose to go before you choose how to get there.

“The answer to how is yes.” Peter Block

#3. Practice 5X encouragement.

Encourage 5X more than you correct.

Which team goes further? A team that constantly cheers for each other or a team that constantly criticizes each other?

#4. Focus on learning.

What are we learning?

How could we do better next time?

What do we need to stop because it isn’t working?

#5. Take action quickly.

Delay kills momentum.

The sooner you begin spinning the flywheel, the quicker you enjoy the flywheel advantage.

Momentum begins with the first step.

#6. Keep spinning after winning.

Wins are endings. You win the race at the end.

Momentum is a series of successful endings that enable beginning again. Reaching today’s goal is an ending point that enables a new beginning.

Momentum killers:

  1. Critiquing small wins.

  2. Devaluing small contributions.

  3. Controlling rather than releasing. Permission-asking kills momentum.

  4. Feedback without encouragement. I believe in you.

  5. Lack of accountability. How are you going to improve? When will we follow up? How can I help? What’s the next step?


Until next month, I hope you and yours are healthy and remain that way and that your business continues to proper. As always, never hesitate to let me know how we can improve our service to you and your company.

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)
jim.sobeck@newsouthsupply.com

Main Office/Branch: Greenville, SC

Other Branches in:

Columbia | Charleston | Myrtle Beach | Hilton Head | Greensboro | Raleigh | Charlotte | Atlanta

Connect with us: Instagram I Facebook I LinkedIn I Twitter | YouTube

Author of The Real Business 101: Lessons From the Trenches. To get your copy see below:

For Smashwords (eBook version for Kindle, iPad, Nook) click here
For direct link to Amazon site (Kindle and print version) click here

August 2021 Newsletter


>> New South eNews
New South Construction Supply

New South News Header - Please load images to view newsletter properly.

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

Zurn

A worldwide leader in trench drain systems

https://gallery.mailchimp.com/f50bf108ac23c82de92d1c6ba/images/f173c96c-5b2b-4524-a834-09580b71b72e.jpg


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)
jim.sobeck@newsouthsupply.com

Main Office/Branch: Greenville, SC

Other Branches in:

Columbia | Charleston | Myrtle Beach | Hilton Head | Greensboro | Raleigh | Charlotte | Atlanta

Connect with us: Instagram I Facebook I LinkedIn I Twitter | YouTube

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

To get your copy see below:

For Smashwords (eBook version for Kindle, iPad, Nook) click here
For direct link to Amazon site (Kindle and print version) click here

July 2021 Newsletter

 


>> New South eNews
New South Construction Supply

New South News Header - Please load images to view newsletter properly.

New South News

Dear Friends,

Our big news this month is that we have hired Abhi Singh as Executive Vice President and Chief Operating Officer. A veteran in the building materials industry, Abhi comes to us from Mid-Am Building Supply, a leading two-step building materials distributor serving 10 states in the Midwest. While there, he was Vice President of Sales and Marketing and led a team that grew sales over $100 million in less than three years. Prior to Mid-Am, he served as Managing Director of Harvey Commercial Solutions in New England, Senior VP of A.H. Harris & Sons Construction Supplies (East Coast), General Manager of J&H Aitcheson – a division of Hajoca Corporation (Metropolitan Washington, DC), and had his own construction supply business in Baltimore, MD – Atlantic Supply Corporation. Earlier in his career, he held a series of senior regional leadership roles for White Cap Construction Supply, Hughes Supply and Ferguson Enterprises, respectively. A graduate of Kent State University, Abhi is now based out of the Greenville, SC company headquarters.

I also want to announce that we are now offering a $500 payment to anyone who lets us know about a person who we end up hiring for any of our open positions. See https://www.newsouthsupply.com/careers/ for our current openings.

We’re in the middle of summer now and construction continues to boom in almost all market segments except for road and bridge work. Talk about an infrastructure bill continues in Washington, but as of this writing, nothing has happened. If an infrastructure bill does pass expect rebar prices to jump significantly. For a detailed look at product pricing, scroll down:

Supply chain and manufacturing issues continue to impact the flow of goods throughout the construction industry. Demand levels remain extremely high with manufacturing and production struggling to keep up. The market and industry remain extremely strong and busy, but the strain on the flow of material does bring some unease to the industry overall. 

Rebar remains in extremely high demand and tight supply. All four major rebar manufacturers in the southeast are reporting large backlogs, little to no sitting inventory, and a continual flow of incoming purchase orders for more material. Lead times are running at a month’s time after purchase order is placed and future production of certain diameters and lengths have already been sold for August. With a recent influx of import rebar hitting the Southeast, the hope is for the import bar to help supplement some of the pent-up demand. If that can happen, we may be able to see some reprieve on the supply side. The rebar market will remain strained for the short term, but the hope is for inventory to become more free flowing late third quarter or early fourth quarter. 

An alternative to traditional steel rebar is now available from Owens Corning, the $7 billion a year maker of roofing and insulation. We are stocking their residential “pink bar” now and can get their commercial Mateen Bar from their plant in Concord, NC. Their rebar is lighter and stronger than regular rebar, plus it doesn’t rust. Our customers who are using it, love it. Give us a call if you’d like a quote.

Wire mesh reinforcing continues to struggle to catch up to industry demand. Wire rod availability remains a major issue and production is outpacing the arrival of more raw materials. Lead times are out to almost four months depending on gauge and size. Another price increase was pushed through early July and that increase will continue to impact pricing for the next few months. Wire mesh issues are expected to continue through the end of the year and into first quarter of 2022.

We made a major buy of wire mesh recently and should be able to meet the needs of our customers through year end. If you need wire mesh for an upcoming project, place your orders as soon as you know your needs to guarantee supply. 

There was little change in polyethylene sheeting from last month’s report in terms of lead times. Straight loads of single size and gauge material are shipping in three or four weeks, with loads of mixed sizes and gauges running roughly a week longer. Pricing did see an increase to start the month, with many manufacturers pushing through a $0.05 per pound increase effective July 6th. 

The lumber industry continues to soften. Buyers have not been as frantic to find availability and have begun trying to work down higher price inventory purchased over the past few months. Some lower pricing SYP is beginning to be realized downstream in the industry, but expectations are for it to fully be recognized in a few weeks. The recent production curtailment of SPF released by a Canadian producer may slow that species’ softening and possibly cause a pricing bounce. The wildfires currently burning in Western Canada have severely impacted the transportation and production capabilities of Canadian sawmills.

The gulf between contractors’ costs and pricing continued to widen again in June. 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 0.4% from May and 3.4% year-over-year (y/y) since June 2020, while the PPI for material and service inputs to construction industries jumped 3.8% and 26.3%, respectively, the Bureau of Labor Statistics (BLS) reported on Tuesday. There were double and even triple-digit percentage y/y increases for numerous inputs: diesel fuel, 127% y/y; lumber and plywood, 101%; steel mill products, 88%; copper and brass mill shapes, 61%; aluminum mill shapes, 33%; plastic construction products, 22%; gypsum products, 18%; truck transportation of freight, 15%; asphalt felt and coatings, 11%; and insulation materials,10%.

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 speak with Rob Strobel, President at Lithko Contracting, LLC. Lithko was founded in the 1990s after a group of concrete construction professionals sought to disrupt the concrete industry by creating a company with a close-to-home strategy in mind. Since then, Lithko has become one of the country’s largest concrete contractors, earning them the #2 spot on ENR’s Top Concrete Contractor list for the last 4 years. Read the full Q&A here to learn more about how Lithko differentiates themselves from competitors, a few incredible projects they are excited about, and their company mission that is focused on excellence.


Featured Manufacturers

CON-DRI

Premier Supplier of Reinforced Poly, Debris Netting, Wood Chamfer, and Vapor Barriers

SpecChem

Makers of Chemicals and Aggregates for the Concrete Industry

DuPont

Premier Supplier of Insulations, Sealants, and Weatherization Products


Associate Profile

Megan Weber
Rebar Estimator/Detailer, Atlanta

This month’s associate profile is of Megan Weber, a rebar estimator/detailer in our Tucker, GA (Atlanta) branch. Prior to joining us Megan was a manager at SWFL Maintenance Company from 2004-2006, Senior Rebar Detailer at a construction supply company from 2007-2021. A native of Fort Myers, FL, Megan is an International Baccalaureate Graduate from Fort Myers High School and holds an associate degree in Business Management with a focus on Construction Management from Florida SouthWestern State College. She also has an Emergency Medical Technical Certificate. She and her husband Bobby (who is in sales for us) have three daughters. She enjoys spending time with her daughters, coaching and playing soccer with her girls, baking, cooking, hiking, camping, boating, and photography. Megan has been a great addition to our team.


Our leadership article this month is entitled, Acknowledging and Encouraging, by legendary leadership consultant, Ken Blanchard. In this article, Ken reiterates his famous advice about catching people doing things right versus wrong.

Acknowledging and Encouraging

By Ken Blanchard

Most leaders genuinely intend to manage people well. Unfortunately, many of them fail to engage and motivate others. Why? I believe it’s because you can’t just hope to be a good leader; you have to consistently practice proven leader behaviors.

There are a set of directive and supportive behaviors leaders can employ to help both people and their organization thrive.  We call these leader behaviors SLII® micro skills.

Of all the supportive SLII® behaviors, my favorite is Acknowledging and Encouraging. If I could only use one management tool for the rest of my life, it would be this:  Catch People Doing Things Right.

Acknowledging Is a Learned Skill

Too often people feel they are working in a vacuum, because no matter how well they perform, nobody notices. Or, if their manager notices, they make overly general comments, such as, “I appreciate your efforts” or “thanks for the good job.” While that’s better than saying nothing, it doesn’t do a whole lot to motivate the person or help that person feel valued.

Do it quickly and in detail. For acknowledgment to be effective, it needs to be immediate and specific. When you notice a job well done, tell the person as soon as possible exactly what they did right. For example:

“When I was called away last week and couldn’t lead the department meeting, you stepped up, asked me for the agenda, and led the team through each item.”

State your feelings. Next, tell the person how what they did impacted you. Don’t intellectualize. State your gut feelings:

“We didn’t miss a single deliverable. I felt so relieved and supported. You made me and the whole department look good. Thank you!”

Notice how much more effective that is than merely saying, “Thanks. Good job.”

To Encourage, Try Praising People

I ask audiences all the time: “How many of you are sick and tired of all the praisings you get at work?” Everybody laughs, because to most of us, praising does not come naturally. Thousands of years of evolution have wired our brains to search for what isn’t right: Is that a stick on the trail or a venomous snake? Is the wind moving that bush or is it a bear? Our tendency to focus on what isn’t right is a protective mechanism. Unfortunately, it makes us more likely to catch each other doing things wrong.

Take marriage, for example. When you first fall in love, your partner can do no wrong. But after a time you notice what bugs you and you start saying things like, “I can’t believe you could make such a stupid mistake!” Far from motivating your partner, comments like these discourage and shut them down.

Praise, on the other hand, is inherently motivating. Research has shown that praise triggers the hypothalamus and releases dopamine, the feel-good chemical in our brains.

Being close counts. You don’t have to wait for exactly the right behavior before praising someone. Even if a person is doing something approximately right, it’s important to recognize their effort.

Suppose your child is just learning to speak and you want to teach him to say, “Give me a glass of water, please.” If you wait until he says the whole sentence before you give him any water, your kid is going to die of thirst! So you start off by saying, “Water! Water!” And when your kid says “waller,” you jump up and down, kiss the boy, and get Grandma on the phone so she can hear him say “waller.” It isn’t “water” but at this stage, you praise him anyway.

You don’t want your kid going into a restaurant at age 21 and asking for a glass of waller, so after a while you only accept the word “water” and then you start on “please.”

Think of encouragement in the same way. In the beginning, catch people doing things approximately right. As their skills develop, gradually move them toward higher levels of competence.

A Positive Cycle 

The importance of acknowledging people’s efforts and encouraging their progress cannot be overstated. These leader behaviors set up a positive cycle: Your praise helps people feel good about themselves. People who feel good about themselves produce good results—and people who produce good results feel good about themselves.

So generate some positive energy and help people reach their full potential. Catch people doing things right!


Until next month I hope you and your business are prospering. As always, don’t hesitate to let me know how we can better serve you. Thank you for your business.

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)
jim.sobeck@newsouthsupply.com

Main Office/Branch: Greenville, SC

Other Branches in:

Columbia | Charleston | Myrtle Beach | Hilton Head | Greensboro | Raleigh | Charlotte | Atlanta

Connect with us: Instagram I Facebook I LinkedIn I Twitter | YouTube

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

To get your copy see below:

For Smashwords (eBook version for Kindle, iPad, Nook) click here
For direct link to Amazon site (Kindle and print version) click here

June 2021 Newsletter


>> New South eNews
New South Construction Supply
New South News Header - Please load images to view newsletter properly.

New South News

Dear Friends,   

We continue to live in unusual times in the construction industry. Price increases, truck shortages, freight surcharges, and not enough drivers all combined to make for rampant price increases and long lead times.  Most all our items remain in stock due to our placing orders months ago for most of the products we sell, as we largely saw this coming. 

For a detailed look at commodity prices, see below:

The supply chain for most products used within the construction industry continues to be in upheaval. Price increase notices continue to be announced almost daily. Many commodity-based items are now being priced at time of shipment, with purchase orders being submitted and taken without definitive pricing. Availability is vastly more important than price at this point in the year. 

Rebar once again saw a price increase in June. On June 11th, two major mills announced increases. One mill increased prices by $80 per ton and the other mill by $50 per ton. By Monday, June 14, two other mills followed suit and pushed through $80 per ton increases. This now puts rebar at an all time high with expectations for the trend to continue. This feels much like the way the lumber run began, so prepare for tight supply and rising prices to continue through the summer. Multiple diameter rollings at the mills are already booked for July and August. 

The massive wire mesh and wire rod availability issue remains a major problem. While the mills are producing material as fast as possible, the shortage of available raw materials to manufacture continues to stifle production. Mesh mills are currently providing 16-17 week lead times on product from the time purchase orders are placed. Distributors are currently having to plan and procure materials that will not arrive until September or October. These lead times continue to push out further each and every week as purchase orders continue to come in. It does not appear this problem will be resolved any time soon. Expectations are for wire mesh shortages to continue through the remainder of the year and possibly beyond. 

Polyethylene sheeting also saw an increase at the beginning of the month. The cost of resins, raw materials, and shipping have forced poly manufacturers to push through another increase. The June increase is in addition to the increase that took effect in May. A combined total value for the May and June increases are roughly $0.10 cents per pound on all poly products. Production times do appear to be improving though, with lead times running 4 or 5 weeks on single size full truckload orders. Mixed sizes are typically taking a week or two longer to arrive. 

One commodity that is seeing some pricing reprieve is lumber. Lumber pricing crested early last month and has been steadily softening over the past month. Availability is becoming much less of an issue and demand for product needed instantly has calmed. Lead times are averaging two to three weeks, but in some cases, material has shipped within a week. 

The gulf between contractors’ costs and pricing widened again in May. The producer price index (PPI) for nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of buildings—increased 0.5% from April and 2.8% year-over-year (y/y) since May 2020, while the PPI for material and service inputs to construction industries jumped 4.3% and 24.3%, respectively, the Bureau of Labor Statistics (BLS) reported on June 15. An index that measures the price of goods inputs to all construction soared 4.6% for the month and 24.3% y/y; both increases were the largest in the 35-year history of the series.

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

For some more exciting news, I am proud to announce we were once again selected as one of the Best Places to Work in South Carolina. We strive to create a workplace that empowers and motivates our associates to give great service to our customers. I hope you feel you receive great superior service when doing business with us.

Catching up with our Customers

In this month’s segment of Catching up with our Customers, we hear from Jason Fisher, Senior Vice President of Operations at Roebuck Buildings Co., Inc. Established in 1947 by John C. Anderson alongside a group of investors, Roebuck Buildings was focused on the pre-engineered building industry. Over the years, Roebuck has changed with the market, now designing, and constructing everything from precast concrete, metal industrial buildings, as well as commercial, automotive, education, religious, and healthcare projects just to mention a few. Roebuck’s wide range of experienced personnel is what drives the company forward, providing value to customers and creating quality products and services which is one of the company’s top priorities. Learn more about the remarkable jobs Roebuck Buildings, Co., Inc. is currently working on, their core values and what those mean to them, and the “why” behind their “Build Better” company motto by reading the full Q/A here.


Featured Manufacturers

 

Makita

Manufacturer of power tools, drill bits, blades, and other equipment

 

Hohmann & Barnard

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

Husqvarna

A Leader in Concrete Cutting Tools and Accessories

 


Associate Profile

Bobby Webber
Sales Manager, Atlanta

This month's associate profile is of Bobby Weber, an Atlanta-based Sales Manager. Bobby was born in Saginaw, Michigan where he graduated from Heritage High School. Bobby moved to Florida after high school where he began a 15-year career with another building material distributor. He started in the warehouse and ended up in a dual role as branch manager and outside sales at the same time. He is married and has three daughters, ages 12, 9 and 7. In his downtime, he likes to camp with his family, movie nights with his girls and attending dirt track races. Bobby has been a great addition to our Atlanta team!


This month’s management article is entitled, Plan Regular 1: 1 Meetings. I have been a fan of 1:1 meetings for over 40 years and think they are one of the best tools available to a manager. I hope you enjoy it.

Plan Regular 1:1 Meetings

By Naphtali Hoff

To unleash the potential of the people you manage, you must engage and bond with each person individually. There simply is no hack or shortcut for building real connections.

That’s why it is critical that, in addition to morning huddles, you need to plan regular one-to-one meeting time, or 1:1s, with individual team members to check in on a more personal manner.

As a manager, you can use 1:1s to ask your team members about their well-being, their experience working with the team and their career goals. You can also get updates on their progress and any challenges they may be experiencing with projects so that you can course correct as needed.

Folks pay attention to those things their leaders also pay attention to. To get what you want from others, you need inspect what you expect of them. Beyond that, 1:1s offer dedicated time for mentoring and coaching, helping to bring out the absolute best in your people.

Other important benefits of 1:1s include:

  • They provide a routine opportunity for you, as a manager, to assess the parts (your individual employees) that lead to the productive whole (your team.)
     
  • Each 1:1 is an opportunity to clarify the goals of the organization and your performance expectations for each person.
     
  • 1:1s help managers build a trusting relationship with their employees by getting to know them as people, not just employees.

At the 1:1, ask your go-to question(s) (more on that below,) stay silent until your employee has the chance to answer, listen with the intent to understand and not to cross-examine, and then reward the candor you receive. Remember that dedicated 1:1 conversations help create the space and trust to ensure you know what’s on people's minds — and take actions to keep them happy and productive.

Lest you think of 1:1s as exclusively manager-driven, I highly recommend that employees be asked to share their talking points with their manager prior to the meetings. This allows the employee to also guide the conversation and ensure that matters that are top of mind for them get discussed.

1:1s should always be conducted face-to-face. That said, when in-person is not possible, hold them anyway. If some or all your employees in your organizations work remotely, it’s important to get as close to a face-to-face conversation as possible.

1:1s are supposed to build strong relationships, which means that leaders must be fully present by giving the other person their full attention. During your meetings, reduce distractions to an absolute minimum. This includes turning off notifications on your devices. It goes without saying that you should come prepared and start on time.

Once you’ve finished your meeting, summarize the most important outcomes and share them to eliminate misunderstandings. Summaries also make it easier to pick up the ball in the next 1:1 meeting. As a manager or employee, you can also just take private notes to keep track of how the 1:1s went and to capture key takeaways for future reference.

1:1s come in all shapes and sizes. Some people meet for an hour weekly. Others for 30 minutes twice monthly. What matters most is creating the rhythm and honoring it consistently. Regardless of length and frequency, making time for an individual says you genuinely care about them as a person.

Once you have a solid meeting routine in place, consider adding some spice by leaving the office every now and then. Head outside for a walk. Go to a cafe. Be creative. No matter where you meet, pick a place where you and your report feel comfortable speaking openly.

You might be thinking that 1:1s sound all nice and good, but if you don’t have the time as it is to get things done, especially now with morning huddles to run, how can you possibly add this to your plate? The answer is that this is a case of spending time to free up time.

1:1s help managers avoid overwhelm by ensuring the team is focused on the right task. Taking a few minutes to coach employees on how to move forward frees up your time to focus intently on your own work with the confidence that you won’t be putting out fires later.

To recap, 1:1s are the only forum where manager and reports can engage in an honest, private conversation with each other about what’s really going on, professionally and personally. It is critical that you make the time for them.

What to discuss
If you are meeting to set worker and team objectives, consider using the following talking points.

  • A recap on why and how to set objectives.
  • Review of previous objectives.
  • Company and team priorities.
  • Current objectives and personal development goals.
  • Next steps.

Here are some questions to ask:

  1. What’s on your mind this week?
  2. How happy were you this past week?
  3. How productive were you this past week?
  4. What feedback do you have for me?
  5. How are you doing? How did the past week/month go?
  6. What would you like to talk about today?
  7. What are you proud of? Anything blocking you?
  8. Do you need any support? How can I help you?
  9. Anything else you’d like to talk about today?
  10. “What are the most important things we should discuss today? And are there any roadblocks or ways how we can better support each other?”

That’s it for this month. I hope the materials shortages aren’t delaying any of your jobs. If they are, let us know and we’ll see if we can help. Enjoy the summer!

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)
jim.sobeck@newsouthsupply.com

Main Office/Branch: Greenville, SC

Other Branches in:

Columbia | Charleston | Myrtle Beach | Hilton Head | Greensboro | Raleigh | Charlotte | Atlanta

Connect with us: Instagram I Facebook I LinkedIn I Twitter | YouTube

Author of The Real Business 101: Lessons From the Trenches. To get your copy see below:

For Smashwords (eBook version for Kindle, iPad, Nook) click here
For direct link to Amazon site (Kindle and print version) click here

May 2021 Newsletter

>> New South eNews
New South Construction Supply

New South News Header - Please load images to view newsletter properly.

New South News

Dear Friends,

We are living in unusual times for sure. Price increases keep coming, product shortages are delaying some jobs, and to top it off, there is a trucking shortage. This is a perfect storm that is creating challenges during unprecedented boom times in the construction industry. Thus far we have been able to remain in stock on all our key products with only a few rare exceptions. If we have inconvenienced you by being out of something momentarily, I apologize. The good news is that lumber prices are finally falling and manufacturers who didn’t build inventory when COVID first hit have been running around the clock and have at least partially recovered.

A detailed look at pricing trends follows below:

The construction materials market continues to be impacted by increasing prices and supply chain issues. Material shortages and scarce trucking availability have only increased the strains seen within the industry. As a whole, the industry appears healthy and striving with a boom of demand and job starts, but the elephant in the room is how long can it last under the current conditions?

Rebar saw a $40.00 per ton increase pushed through on April 29th by one major manufacturer. Within 24 hours, the two other major manufacturers in our region followed suit. While this increase was not shocking to the market, it did come earlier than what was originally anticipated. The increase seems to have had the mill’s desired effect, with orders surging in to cover summer work and beat any potential of further increases. With the recent surge of inbound orders comes availability issues. What moderate inventory that was available at the mills was quickly scooped up and buying off of future rebar rollings became the norm. New inventory will begin to hit the market as these rollings are complete. Expectations are for rebar inventory to remain tight throughout the summer, especially if the high demand continues. 

Wire mesh reinforcing continues to struggle. The world-wide shortage of wire rod is still having a huge impact on overall mesh inventory. Mills are running and producing as much as possible, but lack of raw materials used to make mesh is slowing overall production. Wire mesh rollings set for early June have already been pushed out weeks and lead times are still projecting at three to four months after time of purchase. 

Polyethylene sheeting maybe the most stable of our four major commodity items. While pricing has not subsided from the spring increases, production and lead times are holding steady. Spot market purchases are running at roughly a month’s lead times, with some lower costs being presented on longer lead time and future purchases.  While this isn’t near where the poly market was this time last year, some form of stability has been good to see. 

The lumber roller coaster continues on. Last month we spoke about how lumber was in a rapid climb… while not in a rapid decline, lumber seems to have peaked and started moving back the other way. More loads are becoming available and production is remaining strong. Activity on the broker’s side has picked up as they try to move high priced loads bought on the upswing before the market crested. Prices remain high, but lumber futures, having trended down for almost a week, give signs that the lumber market may have reached the peak.

The producer price index (PPI) for nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of buildings—increased 1.2% from March and 2.3% year-over-year (y/y) since April 2020, while the PPI for material and service inputs to new nonresidential construction jumped 1.5% and 17.6%, respectively, the Bureau of Labor Statistics (BLS) reported on May 13.

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 highlight Exterior Expressions, Inc., a turnkey masonry company that’s skilled in every type of masonry work, including structural and architectural block, brick, stone, and cast stone. In 2013, Jason Overly, and Eric and Robert “Bobby” Allen III became owners of Exterior Expressions, growing the company by expanding into Charlotte, NC and Charleston, SC. Learn about the impressive projects Exterior Expressions has been a part of, their noble company motto, and the company’s core values by reading the full Q&A here.


Featured Manufacturers

CON-DRI

Premier Supplier of Reinforced Poly, Debris Netting, Wood Chamfer, and Vapor Barriers

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.

Grip Rite

Premier Supplier of tools, fasteners, sealants and adhesives


Associate Profile

Phil Jones
Sales Manager, Atlanta

This month’s associate profile is of Phil Jones, one of our Atlanta-based sales managers. Phil was born in Fort Lauderdale, FL and is a graduate of Charlotte High School in Punta Gorda, FL. Phil had a full academic and athletic scholarship to the University of Florida until he blew out his knees and couldn’t play baseball, so he decided not to attend college. Instead, he chose to pursue a career in the building supply business. Phil joined us this past March after 17 years with three other supply companies. Phil is single but has been in a long-time relationship for the last 6+ years. He has no children, but he does have three dogs. During his downtime he enjoys working with his hands and doing projects around the house and remodeling jobs. He enjoys being outside in nature so when he has time, he likes to ride his Harley to clear his mind and relax. Phil hit the ground running when he started with us in Atlanta and is the only new salesperson I can remember to have a sale ship to a new customer on his first day. Welcome aboard, Phil!


Our leadership article this month is titled Traits of Great Leaders. What sets apart a great leader from a not-so-great leader? Read this article to find out.

Traits of Great Leaders

By Howard Shore

Consider all the leaders you have encountered in government, schools, jobs and organizations. How many of them have you thought of as excellent or even above average?

Recently, I have been pondering why there are so few contemporary leaders I admire and perceive as great. What surprises me is that while they may be hardworking, determined, wealthy, smart and considered successful in many ways, I still do not see them as great leaders.

With so many books written and courses offered on leadership and leadership training, we still lack great leadership everywhere. The books have great content, and the training was valuable, yet something is missing! What’s become evident is that we may be focusing on the wrong attributes. Furthermore, there is no single, recognized standard as to what it means to be a great leader! You can go through the motions and activities of leadership and still fail as a leader.

Some people believe leadership is a title. But we do not need a title to lead, and we can have a title and not be an effective leader. This was well-illustrated by the high school students from Parkland, Fla., after the horrific mass shooting that occurred in 2018. Many students took leadership into their own hands and had a significant impact on our nation. The fact is that one can lead every day of their life.

Some people believe great leadership is about achieving outcomes. However, the focus on results has caused many leaders to go to great lengths to produce them at any cost. Notable examples in recent times are the Wells Fargo fake accounts, Bernie Madoff’s Ponzi scheme and Cambridge Analytica’s use of our records on Facebook. These are extreme cases, but to what extent do outcomes outweigh someone’s impact on others and society? Where does personal conduct come to present itself? Think about Bill Cosby and Harvey Weinstein.

We need to place weight on how leaders affect the trust and confidence of others along the way as we measure their accomplishments. While results are essential, we must place equal or greater importance on how one obtained the results, how that leader has impacted others, and how they have conducted themselves — both publicly and privately.

After evaluating hundreds of leaders, I identified the critical attribute of some great ones: Abraham Lincoln, Nelson Mandela, Margaret Thatcher and Warren Buffett. We are far more fascinated by them as people than by their accomplishments and the impact they have had on society. Our interest has more to do with how they conducted themselves over a lifetime. We call this character! They are not perfect, and each has had missteps and done things people disagree with, but these are people of tremendous character.

Let me share the five character traits I look for in leaders to define them as great. I think you will agree that Lincoln, Mandela, Thatcher and Buffett demonstrate these.

The first trait is integrity. Do the right thing always. Integrity is being able to put your self-interests aside and take the right action. Too many people choose their own interests without hesitation and then act surprised by the suggestion that anyone else would consider another choice. I tell my team members not to do anything they would be embarrassed to read about on the front page of a newspaper or on social media.

The second character trait for great leaders is humility. Be humble and curious; it is essential. People who lack humility think that only an elite few, if any, have contributed to their success. Great leaders realize that their success is a consequence of efforts by many others, if not all, the people in their lives. When you are humble, you continually examine others’ ideas and methods because you know you can always get better. To me, this is quite possibly the most potent character trait.

The third character trait for great leaders is expressing care. Show everyone that they are special. You must care for others; everyone deserves it. Too many leaders believe they are entitled to be cared for, but when it comes to giving care, they dole it out as if there is a class system, and then are surprised by the repercussions. Great leaders have the extraordinary ability to put themselves in the place of another, to empathize with what others are feeling and to understand others’ motives and desires. Weak leaders are oblivious to other points of view — nor do they care about them.

The fourth character trait is consistency. Be reliable and predictable. When you have someone in your life you find unreliable and unpredictable, someone who has been known to demonstrate erratic behavior, how does that make you feel? Dealing with someone whose response is inconsistent causes stress and disharmony. Imagine spending every day consumed with worry about what the leader is going to do. So much time is wasted discussing what these people have done or might do next; it is unproductive. But when someone gives and keeps his or her word, is reliable and predictable, it allows you to feel free to operate at full capacity, be creative and confident, and reach your full potential.

The fifth character trait is influence. Have a positive impact on others. This last trait is important because it demonstrates that a leader is there to serve others, not themself. Poor leaders believe that others are there to help them. They try to figure out how to use people to their advantage.

Influence is the ultimate superpower. Great leaders go big or go home. Their influence is not just on a small team. They impact their communities and perhaps the world.

A person’s character is the only way to measure great leadership. Earlier in the chapter, I mentioned that we all fulfill multiple roles. Every employee may have to act as a leader at a given time. Therefore, we all must demonstrate good character. The beautiful thing is that we can choose whether we want to have integrity, be respectful, have humility, be consistent, be influential — or not. In every interaction, we have a choice.

Lincoln, Mandela, Thatcher, and Buffett spent lifetimes choosing to demonstrate these traits; there is no reason you cannot make the same choices. Managers must set an example for their subordinates!


In closing, I once again urge you to plan your material requirements far in advance of what was the norm in the past. I suggest that you buy out your jobs as soon as they are firm to avoid price increases and shortages. Until things get back to normal, enjoy the nice summer weather and the strong construction economy.

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)
jim.sobeck@newsouthsupply.com

Main Office/Branch: Greenville, SC

Other Branches in:

Columbia | Charleston | Myrtle Beach | Hilton Head | Greensboro | Raleigh | Charlotte | Atlanta

Connect with us: Instagram I Facebook I LinkedIn I Twitter | YouTube

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

To get your copy see below:

For Smashwords (eBook version for Kindle, iPad, Nook) click here
For direct link to Amazon site (Kindle and print version) click here

April 2021 Newsletter

>> New South eNews
New South Construction Supply
New South News Header - Please load images to view newsletter properly.

New South News

Dear Friends,

The construction economy continues to boom and with warmer weather upon us we expect it to get even stronger over the spring and summer months. We remain busy at all nine branches, and here are some highlights from the past month across the Carolinas and Georgia:

  • Our tilt up business continues to grow by leaps and bounds. We added nine tilt up jobs to our backlog in March alone. Our first quarter tilt up sales were 5X all of last year!
  • Our backlog of business is now at an all time high.
  • For the twelfth year, we were a sponsor of the PGA Tour’s Heritage golf tournament April 12-18. We got to spend time with a lot of customers and suppliers in a casual, fun environment.
  • We added two more experienced outside salespeople in Atlanta as well as another rebar estimator/detailer.

Within the building materials industry, the biggest news we’re seeing right now is around material prices and lengthening lead times, and in my 45 years in this business, I’ve never seen such a demand/supply imbalance. We will keep you posted in these newsletters or via our social media channels if projects end up being delayed or even canceled across the U.S. due to these imbalances.

See below for a closer look at pricing trends for the major products we distribute:

The wild world of the construction materials market continues into April. Supply chain issues, high summer demand, and raw material availability all having major impacts on the price and movement of goods. See below on how all these factors are impacting a multitude of products within the construction industry.

The greatest impacts currently on the price of rebar are overall market demand and transportation costs. Market demands have continued to rise, and expectations are for that to continue as we move into the busy season. Mills are reporting large backlogs with limited availability of sitting inventory. While pricing has remained firm over the past month, if availability becomes an issue, we can expect pricing to rise as a result. The other impacts currently affecting rebar are rising transportation costs and a truck shortage. As a result, one major mill has implemented a 7% increase on freight effective May 1st. This increase will be effective on all purchase orders shipped on or after May 1st regardless of when the purchase order was submitted.

Putting it lightly… the supply chain of wire mesh reinforcing has been decimated over the past two months. Both domestic and international wire rod shortages have crippled the flow of reinforcing mesh into the market. Shortages have been so impactful that multiple mills have had to shut down machines due to the lack of wire rod needed to produce both sheets and rolls. Even with the availability of mesh being constrained, demand for mesh continues to rise. Mill backlogs are massive and lead times are stretching out to over 12 weeks in some cases. This issue does not look to be resolved any time soon and expectations are for the wire mesh market to remain in a chaotic state for the foreseeable future.

The polyethylene sheeting inventory and supply chain also remains constrained. While mills seem to be back up and running at full capacity, the downtime from the storms in South Texas in February is still having an impact. Lead times are slightly better than where they were last month but are still running in the 8 – 10-week range. While we expect inventory to remain tight in the short-term, poly inventory and availability should bounce back quicker than that of wire mesh mentioned above.

Lumber continues to be a roller coaster. While experiencing a few weeks of relative stability, the lumber market is once again in a rapid climb. Lumber again posted up this week and settled anywhere from 40% to 80% up depending on species and size over the prior week’s numbers. High demand and limited inbound inventory are driving this increase. 2×4’s and 2×8’s are still fairly available on the open market, but 2×10’s and larger sizes are becoming less and less available. When these larger sizes do become available, loads are being bought quickly with price being less of factor. There are some opinions in the industry that the lumber market will turn over by the third or fourth quarter this year as mills catch up on production, but in the short term, prices are expected to continue to rise.

The gap between input costs for construction and contractors’ bid prices widened further in March. The producer price index (PPI) for nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of buildings—increased 0.5% from February and 1.7% year-over-year (y/y) since March 2020, while the PPI for material and service inputs to new nonresidential construction jumped 2.7% and 12.4%, respectively, the Bureau of Labor Statistics (BLS) reported today. An index that measures the price of goods inputs to all construction soared 3.5% for the month and 12.9% y/y, the largest increases in the 35-year history of the series. AGC posted tables and charts showing PPIs relevant to construction.

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’re speaking with Mark Hood, President and CEO of Hood Construction. Founded in 1986, Hood Construction is a full-service construction management and general contracting firm that services a variety of different industries. They have also received awards and recognition for their exemplary service and attention to safety protocols. Learn more about Hood Construction’s dedication to their clients, commitment to safety on the job site, and cohesive company culture by reading the Q&A here.


Featured Manufacturers

 

Sika/Scofield

The #1 Ranked Brand Name in Decorative Concrete Color, Texture and Performance Systems

SpecChem

Makers of Chemicals and Aggregates for the Concrete Industry

DuPont

Premier Supplier of Insulations, Sealants, and Weatherization Products


 


Associate Profile

Beverly Canady
Project Tracking Specialist, Greenville

This month's associate profile is of Beverly Canady, our Project Tracking Specialist, based out of our Greenville, SC branch. Prior to joining us in July 2020, she worked at Westside Building Material, Anaheim, CA (2009-2020), L&W Supply, Orange, CA (2002-2008) and Rew Materials, Lenexa, KS (1998-2002). Originally from Louisiana, Bev attended college at Louisiana Tech and Northwestern State University. Bev has three grown children and eight grandchildren. She is an Animal Rights Activist and enjoys trap shooting, fly fishing, and traveling. Bev has never met a stranger and enjoys getting to know NSCS customers and learning all about their jobs. We are thrilled to have Bev on our team!


Our leadership article this month is my recent column in the Upstate Business Journal on the benefits of being active in trade associations. Click here to read the article.


That’s all for this month. Remember to plan for longer lead times than in the past for your material needs and factor in higher prices or add an escalation clause to your proposals until price increases abate some.
 

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)
jim.sobeck@newsouthsupply.com
Connect with us: Twitter | YouTube | Facebook | LinkedIn | Instagram

Author of The Real Business 101: Lessons From the Trenches
Get your copy below.
For Smashwords (eBook version for Kindle, iPad, Nook) click here
For direct link to Amazon site (Kindle and print version) click here

March 2021 Newsletter


>> New South eNews
New South Construction Supply
New South News Header - Please load images to view newsletter properly.

New South News

Dear Friends,

There has been a lot of good news since my February letter. First, Congress passed another Covid-19 relief bill, this one for $1.9 trillion. This will “juice” the economy and most economists have adjusted their GDP estimates for 2021 upwards as high as 6.9%, the highest in many years. Congress is also edging closer to an infrastructure bill, which if passed, will further stimulate the construction economy. Winter is over and drier, warmer weather is now upon us. All these things add up to a very positive outlook for construction.

The only dampening effect is all the prices increases we’ve been seeing. Read on to learn more about announced increases for the main products we sell.

Most manufacturers of construction products pushed through some form of price increase in March if not already done so in February. Construction commodity goods were not immune either and also saw numerous price adjustments.

Rebar once again saw an increase in early March. All three major mills in the Southeast announced a $40 per ton increase on March 9th and March 10th. Raw material shortages and scrap metal again posting up $50 per ton in March were given as the reasons for the increase. As demand for rebar remains high moving into Spring and Summer, expectations are for this price increase to stick. The most recent increase continues the uncertainty in the market and has buyers once again scrambling to make purchases to cover current and future work.

Wire mesh reinforcing also saw increases in March. An initial price increase was pushed out in early March by all major mills and was thought to be the only expected one to occur for the month. Roughly three weeks later another price increase was announced by one major mill with the others holding tight. The remaining mills are not expected to hold current pricing for long and we expect the remaining mills to follow in the coming weeks. Scrap pricing and a nation-wide shortage of wire rod used to manufacture reinforcing mesh are causing the volatility and climbing prices.

Lumber may be the one commodity that has not seen as much volatility in March. While pricing remains high (and slightly climbing), the large day-to-day increases have not occurred as frequently. Domestic production is still struggling to keep up with demand, but an influx of import material has helped to subsidize some of the high demand. As demand remains high, the expectation for lumber prices in the short term is to for them to continue to increase. The outlook for pricing looks more like a gradual incline rather than the hockey stick style increase we saw in the fall of 2020 and earlier this year.

The product seeing the most impact in March was polyethylene sheeting. The recent winter storms in Texas completely upended the resin and poly production in that region. Not only was manufacturing time lost due to the storm, but equipment and some facilities experienced major damage. These damages and production delays have caused multiple poly manufacturers and resin manufacturers to declare force majeure on many of their products. Poly sheeting pricing has seen increases of almost 20% in just the past month with more expected to follow. We expect poly sheeting pricing and supply to be a major issue for the remainder of 2021.

Below are more construction material manufacturers that have announced price increases.

OCM Inc. has announced a price increase effective March 15th, 2021. This ranged from 7% to 10% on all steel products. Global supply chain issues on both raw materials and finished goods are mentioned as the need for the price increase.

Prime Resins has announced that they will be implementing a product “surcharge” as a temporary measure to combat rapid price increases on raw materials. They anticipate the temporary surcharge to last roughly 4 to 6 months and should reduce over that time period.

Tremco Inc. has also moved forward with a temporary surcharge on all products excluding their silicones, ERP, and PUMA products. Tremco expects the 7.5% surcharge to be effective for 90 days, but all depends on market conditions.

Pecora Corporation implemented their temporary surcharge of 6.5% on all latex, epoxy, polyurethane, hybrid, and butyl products. Silicone sealants are currently exempt from this surcharge. The lack of raw materials in the supply chain is listed as the driving force behind the surcharge.

SpecChem announced a price increase on March 10th. Immediate price increases on epoxy and polyurea products (10% increase), cure and seal solvent products (10% increase), and freight surcharges are all now in effect. The increases in freight costs and limited raw goods are the causes for the increase.

Quad-Lock has announced a minimum 7% increase on all Quad-Lock and Quad-Deck products effective April 15th. All current orders must be shipped by this date or are subject to repricing.

Nomaco also released a price increase set for April 15th. All orders placed before April 15th for immediate shipment will have old pricing honored. Any order placed after April 15th will see a 7% increase on the Nomaflex, SOFRod, HBR, HBR XL, SOF Seal, SOF Seal Plus, and Fastflex products.

DuPont (formerly Dow Chemical) announced an 8% increase on extruded polystyrene (Styrofoam) and a 5% increase on ISO that will begin on April 15th. All orders placed before April 2nd, with a ship date prior to April 15th will invoice at old pricing. DuPont also announced a 12-15% increase on their Spray Polyurethane products beginning April 12th. All orders shipping on or after this date will be subject to the price increase.

Prosoco announced a price increase effective April 1st. Products impacted by this price increase include Clean & Protect Products (7.5% increase), Concrete Flooring Products (7.5% increase), and Building Envelope Products (4.5% increase). All orders must be placed before April 1st and ship prior to April 15th to be invoiced at old pricing.

One year after the pandemic struck, construction firms are experiencing soaring materials costs, widespread supply-chain problems, and continuing project deferrals and cancellations, according to a survey AGC released on March 11. The producer price index (PPI) for nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of buildings—increased 0.3% from January, while the PPI for inputs to new nonresidential construction jumped 1.9%, the Bureau of Labor Statistics (BLS) reported on March 12. AGC posted tables and charts showing PPIs relevant to construction. Since hitting a low in April, the nonresidential building “bid price” PPI has edged up only 0.5%, while PPIs for new-construction inputs have soared 12.8% for nonresidential and 13.9% for residential.
 
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 catch up with Garett Harvey, president of CBM Concrete. Garett first began his journey in the concrete industry right after college, working at Savannah Hardscapes where he found his appreciation for concrete work. Garett then moved on to create Outdoor Accents, a company that had concrete, masonry, and decorative concrete services.

After several years, Outdoor Accents began focusing strictly on concrete projects which led to the creation of CBM Concrete and brought the company to where it is today. Learn more about Garett’s favorite jobs, his regard for “large/small” businesses, and the special meaning behind the CBM name by reading the full Q&A on our website.


Featured Manufacturers

 

Makita

Manufacturer of power tools, drill bits, blades, and other equipment

OCM

Provider of concrete forming supplies and reinforcement products

https://gallery.mailchimp.com/f50bf108ac23c82de92d1c6ba/images/f173c96c-5b2b-4524-a834-09580b71b72e.jpg

MARSHALLTOWN

Professional quality concrete and masonry tools
 


 


Associate Profile

Sam Shaw
Warehouse Rebar Fabricator Associate, Greenville

This month's associate profile is of Sam Shaw, a Warehouse/Rebar Fabricator Associate in our Greenville branch. Sam was born in Greenville and is a graduate of Riverside High School and received his Associates Degree in Business from Greenville Technical College. Prior to joining us this past January Sam was self-employed in the drone photography business. Sam’s hobbies include “spirited motorcycle riding”, spending time with his girlfriend and her son, and going on social outings with friends. Sam has made an immediate impact on the Greenville team with his work ethic and “can do” attitude.


Our Leadership story this month is titled, Six Practices That Will Make You a Better Listener. Many supervisors are better talkers than listeners (including yours truly), so I learned some good tips from this article. If you’re trying to be a better listener, give this a read.

6 Practices That Will Make You a Better Listener

By Ken Blanchard

As we begin to come out of the coronavirus pandemic and run smack into the turmoil around continuing racism in our country, I think it’s a good time to review an essential leadership skill: listening.

So often the key to overcoming a difficulty—whether it’s in the workplace or at home—is to stop talking and start listening. I often like to joke that if God had wanted us to talk more than listen, he would have given us two mouths.

Yet few people have mastered the art of listening. Why is this seemingly simple skill so difficult?

Research published by Wendell Johnson in the Harvard Business Review examined one way the listening process goes wrong. Johnson found that because of how our brains work, we think much faster than people talk. As we listen to someone talk, we have time to think of things other than what the person is saying. As a result, we end up listening to a few thoughts of our own in addition to the words we’re hearing spoken. Usually we can get back to what the person is saying, but sometimes we listen to our own thoughts too long and miss part of the other person’s message.

To sharpen your listening skills, learn to apply the following six practices.
 

  1. Resist the Temptation to Jump In. Sometimes people need time to formulate their thoughts. Particularly if you’re an extrovert, control the impulse to finish people’s sentences or fill silences with your own opinions and ideas.
     
  2. Pay Attention to Body Language. Listen with your eyes as well as your ears. Watch a person’s face and body movements. Are they avoiding eye contact? What about the tone of their voice—do you hear confidence, eagerness, or perhaps irritation? Be aware of clues that their silent behaviors provide, while being sensitive to your own nonverbal signals. For example, is your body language encouraging someone to continue with a conversation, or silently telling them to stop?
     
  3. Ask Questions. This is not about interrogation or control. Use well thought-out questions to seek information, opinions, or ideas that will help you understand exactly what is being said. Use open-ended questions to encourage communication; for example, “Can you tell me more about that?” Ask clarifying questions to check for understanding; for example, “When did this happen?” Ask prompting questions to encourage deeper thinking; for example, “What do you think caused this to happen?”
     
  4. Reflect FeelingsAcknowledge any emotions the person is expressing and show them you understand by restating their feelings back to them in a nonjudgmental way. This demonstrates that you not only understand their message but also empathize with their feelings.
     
  5. Paraphrase. Again, resist the temptation to respond with your own thoughts. Instead, restate in your own words what the person said. This demonstrates that you heard what they said and assures that you heard them correctly.
     
  6. Summarize. State in a nutshell what was communicated during the entire conversation. Don’t worry about repeating the exact words. What’s important is to capture the main points and general sequence of what was said. This is where you want to reflect the speaker’s conclusion back to them to indicate that you understand.

 
These practices are not easy—they require time and effort to master. But once you do master them, you’ll build more satisfying relationships. You’ll also avoid a lot of the errors, frustrations, and inefficiencies that come from unclear communication. Think of how our homes, workplaces, nation, and world could change for the better if we all learned to listen to one another.


That’s all for this month. Spring is here and the economy is about to boom, so buckle your chin strap and get ready for a strong building season.

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)
jim.sobeck@newsouthsupply.com
Connect with us: Twitter | YouTube | Facebook | LinkedIn | Instagram

Author of The Real Business 101: Lessons From the Trenches
Get your copy below.
For Smashwords (eBook version for Kindle, iPad, Nook) click here
For direct link to Amazon site (Kindle and print version) click here