September 2020 Newsletter

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New South News

Dear Friends,

As this unusual year continues to unfold, the construction industry continues to remain strong. Single- family home construction and resales are booming, and many commercial project starts that were on hold are now moving forward. Fingers crossed for a vaccine breakthrough and for Covid-19 to end so we can all get back to “normal.”

I am pleased with the positive construction news; however, this also results in a downside: price increases. See below for more info on that.

The rumors of a price increase on rebar came to fruition the second week of September. Scrap prices continue to rise and posted up $45/ton to start September causing an adjustment from the mills. With the hike in scrap prices, CMC Steel led the way and pushed through a $40 per ton increase on rebar the second week of September. By the end of the next week both Nucor Corporation and Gerdau followed suit. With scrap in shorter supply and global demand increasing, we expect this price increase to hold and this may only be the first round of increases. Multiple signs are pointing to another increase coming in mid-October. Scrap pricing is expected to continue to climb and is currently outpacing rebar pricing by $10 – $20 per ton. That variance in cost is being monitored by the mills, and the market could see another increase to bring those costs closer together.

There has been no change in current wire mesh pricing after last month’s 7-9% increase went into effect. Pricing has remained stable over the past few weeks, but like rebar, scrap prices are having an impact on production costs. No official announcements on price increases have been released yet, but we expect two or three manufacturing mills in the Southeast to announce another price increase in the coming weeks. Now would be a good time to place any stocking or project-based orders to beat the pending

Polyethylene continues the trend of increases in commodity goods. The recent hurricanes in the gulf have had a major impact on production lead time and the distribution of raw materials. Much of the country’s poly sheeting is manufactured in Texas and the back to back hurricanes put almost a two week hold on production. Lead time for truckloads of poly are now exceeding three or four weeks. We have already received one price increase with an approximate increase of 6% pending. This increase is being pushed through mainly due to the multiple increases in resin costs the manufacturers have absorbed over the past few months. Price increases will go into effect on any orders placed after October 12th, with all orders placed for immediate shipment before October 9 th being billed at current costs.

Lumber pricing remains high moving into the fall season. On a positive note, more loads seem to be available and covering needs has not been as difficult as the prior few months. Pricing, while still high, has seemed to stabilize for the time being and the historical climb since April has plateaued a bit. We expect pricing to remain high for the short term, but are hopeful relief is in sight. Lumber pricing typically softens in the winter months with reduced demand and the hope is that trend continues this winter.

Here are a few other manufacturers of note that have announced upcoming price increases:

Wire Bond, a leading manufacturer of masonry reinforcing and accessories, has announced a price increase on wire items that will go into effect in mid-October. The estimated increase is expected to be 10-12%. The major reason for the increase is scrap metal being in short supply and high demand.

Specified Technologies has released a price increase notice on their firestopping products for 2021. An increase to not exceed 3.5% on most products will go into effect on January 1, 2021. This increase is based on increases in raw materials, transportation, and general operating costs.

We will continue to update you with any additional price increases or market changes.

Construction costs diverged again in August, as indicated by producer price indexes (PPIs) that the Bureau of Labor Statistics (BLS) posted on September 10. AGC posted tables showing PPIs relevant to construction. The PPI for new nonresidential building construction or “bid price” index—a measure of the price that contractors say they would charge to build a fixed set of buildings—slipped 0.3% for the month, not seasonally adjusted, and is up just 0.1% since April. Meanwhile, the PPI for inputs to new nonresidential construction rose 0.7% in August, for a four-month gain of 4.1%. The PPI for new residential construction climbed 1.8% in August and 4.9% over four months. Compared to August 2019, the PPI for new nonresidential building construction increased 2.0% year-over-year (y/y), while the PPI for inputs to new construction inched up 0.1% for nonresidential and rose 2.5% for residential. Items important to construction with large 1- or 12-month changes include: lumber and plywood, up 11% for the month and 27% y/y; copper and brass mill shapes, 3.2% and 7.9%, respectively; diesel fuel, 5.9% and -7.3%; aluminum mill shapes, 1.7% and -9.8%; and steel mill products, -1.7% and -11%.

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

Catching up with our Customers

Featured in this month’s Catching Up With Customers Q&A installment, meet Mike Turner and John Bueltel of Cornerstone Masonry Group LLC. After interviewing John (President) and Mike (VP), it is clear they are most proud of their dedicated and hard-working employees who are integrated into every part of their business. Whether they are working on Cornerstone Masonry projects throughout the southeast, the Cornerstone Masonry church mission in Honduras, or as mechanics for Cornerstone’s American Flat Track Series Motorcycle Racing Team, they know they can count on them to get the job done, similarly to how they count on New South every day to supply their masonry construction needs. Read the full Q&A by visiting our website. There, you will learn more about the two competitors who became partners, combined their vast knowledge of industry and craft, and turned it into the reputable business they have today.

Featured Manufacturers


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NSCS Associate Updates

This month we gave $5,000 bonuses to five of our CDL drivers, Ron Conover (Greenville), Scott Haas (Columbia), Tom Twiddy (Greensboro), Eric Singleton (Charleston), and Grady Sutton (Raleigh). We give our CDL drivers $5,000 bonuses for every five years of service to say thank you after years of loyalty, safe driving and working hard for our customers. Our drivers are the face of our company to most customers as we deliver most of what we sell. These gentlemen represent us extremely well and were very deserving of these bonuses. Click here to see all of the photos of our drivers receiving their recent bonus checks.

Associate Profile

Dylan Logan
Manager in Training, Greenville, SC

Our Associate Spotlight this month is of Dylan Logan, a Manager in Training in our Greenville branch. Dylan was born in Hackettstown, NJ and graduated from Mauldin High School, near Greenville. He then earned his B.S. in Criminal Justice from Clemson University in 2019. Prior to joining us back in June he was the manager of a car wash in Simpsonville, SC and was also a Facilities Specialist at Brookwood Church. Dylan enjoys spending time with his girlfriend, watching Clemson football, working out, and spending time with friends. Dylan is one of the fastest learners we’ve ever hired, and he’s made an immediate positive impact on the Greenville branch.

Our management article this month is, Ideas for Supporting Remote Workers and Workplace Culture. With many companies still not back in the office there are challenges with perpetuating your company’s culture among remote workers. There are several good ideas in this article to help with that issue.

Ideas for supporting remote workers, workplace culture

By Will Bunch

In the early months after Submittable, a Missoula, Mont.-based software company that employs about 100 people, shut down its office because of the coronavirus and told employees to work from home, people manager Asta So spent a lot of time figuring out how and when to bring workers back. But as the pandemic dragged on, her focus has increasingly been on boosting the morale and gauging the work/life balance of homebound employees.

“One of the things I’m trying to figure out is how to keep our culture,” So says. One of her recent projects was “trying to get 15 random employees to get shaved ice in this park near our office—to go outside and, socially distanced, see people that they don’t normally get to see, to cultivate more spontaneous or impulsive interactions.”

In the beginning of the COVID-19 shutdown, So and her teams also organized virtual lunch get- togethers, though lately there’s been some “Zoom fatigue.” Now, some teams are establishing lunch hours where people make sure to go offline or trying to arrange one-on-one meetings in safe outdoor locations—although, “with winter coming, it’s going to be more tricky.”

None of this was in the training manual for So—or for any other HR executive—when they signed up for people management. As the extended pandemic not only triggered lengthy shutdowns but also inspired many firms to announce full-time work from home options for many or all employees, people managers needed creative solutions to brand-new problems. Do workers have the right technology, ergonomic chairs or other logistical support? How do you foster a collaborative culture when workers aren’t in the same place? And what about workers who struggle emotionally with being home alone?

“The biggest problem is isolation: How do you force these collaborative pathways?” says Nancy Rothbard, professor of management at the University of Pennsylvania’s Wharton School. She says one of the biggest new tasks for HR is to work closely with middle managers to make sure they have the right tools and apps, and a smart strategy, to make teamwork happen remotely. “The virtual watercooler is needed,” Rothbard says, “but it may feel weird to managers, and so you will need to create models.”

Rothbard also notes that companies saving money from downsizing offices or expenses such as maintenance need to think about ways to reinvest some of these dollars on the new needs of employees working from home. Some firms are already doing that, including ServiceNow, the Santa Clara, Calif.-based software company, which early in the pandemic gave each homebound employee $500 to spend on wellness needs, then expanded the payout to $700 to address other issues such as technology for workers’ kids learning from home.

Karen Drosky, a vice president for human resources at ServiceNow, says monthly wellness surveys have been critical. “Those wellness surveys informed us what we needed to do to make employees happier,” she says. “They told us what they needed.” ServiceNow also employs gimmicks such as a contest for the best “staycation,” because the tech firm—like many of its rivals—worried that locked-down employees weren’t using their time off.

Submittable’s So says she also directs considerable attention to keeping the workforce both energized and connected without an office, taking formerly in-house features like exercise classes or lunchtime-discussion groups onto platforms such as Zoom. “We’re trying to translate all the things we used to do in-person to online,” she says.

Alex Alonso, the chief knowledge officer at the Society of Human Resource Management, says it’s important for HR leaders to be patient, realize the pandemic may not end quickly and be flexible. “I would ask most HR officers, people managers and other business leaders to think about what happens in the pandemic that you’re going to make permanent,” he says, “and, rather than just thinking in terms of cost and operations, think about what kind of cognitive work to take from this so when the next situation arises, you’re ready to deal with any number of challenges that arise.”

In closing, with every day that passes we get closer to getting back to normal. Until then we just need to keep on keeping on. Thank you for your continued support.

Best regards,

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


August 2020 Newsletter

>> New South eNews
New South Construction Supply

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New South News

Dear Friends,

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

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

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

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

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

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

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

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

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

“Catching up with our Customers”

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

Featured Manufacturers


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Associate Profile

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

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

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

How to prioritize when everything is a priority

By Naphtali Hoff

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

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

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

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

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

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

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

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

2. What is the task’s value or ROI?

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

3. Is it related to your goals?

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

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

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

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

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

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

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

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

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

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

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

Best regards,

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