22 Dec December 2017 Newsletter
First and foremost, on behalf of all of our associates I’d like to wish all of our customers and suppliers a Merry Christmas and Happy Holidays as well as best wishes for the New Year.
December 2017 Newsletter
First and foremost, on behalf of all of our associates I’d like to wish all of our customers and suppliers a Merry Christmas and Happy Holidays as well as best wishes for the New Year. As usual, rather than send cards out which quickly end up in a landfill we made a donation to the American Red Cross in honor of our customers.
The year is almost in the books and by most measures it was another good one for construction. As it now looks like Congress will soon be approving a new tax plan that should be the shot of B-12 needed to keep the economy from dipping into a recession in 2018. At least I hope so.
Price increases continue to be announced for many of the products we distribute so I encourage you to read closely below for an in-depth look at pricing trends.
The price for scrap steel moved up by $30/ton on the Chicago Metals Exchange the first week in December, as well as other metal exchanges in the US, and most analysts expect another increase in January by a like amount. Scrap steel prices on foreign exchanges increased by as much as $40/ton and steel billet prices rose by as much as 20% in some foreign markets. Resin manufacturers were able to push through a price increase for polystyrene resin in December and have indicated they will increase prices for other resin types in January.
With the increased demand over the past few months for domestic rebar and as the price for domestic scrap steel increased in December, CMC announced a $25/ton price increase on December 6th effective immediately. Nucor, Gerdau, and other mills in the east and southeast quickly followed CMC’s lead and announced a $25/ton price increase on December 7th. Like CMC’s price increase, the other mills’ price increases were effective immediately. As the price for scrap steel is expected to move up again in January and with the ever decreasing availability of imported rebar, most analysts expect domestic mills to increase prices again in early January. If you have any projects that require rebar consider buying out these jobs before January to avoid paying higher prices.
Due to the worldwide increase in the price of scrap steel and steel billets domestic wire rod manufacturers will increase prices in January. Nucor, Gerdau, and Keystone, three of the largest manufacturers of wire rod in the US, will increase their prices between $45 and $60/ton on January 2nd. Several foreign wire rod manufacturers also announced a price increase of as much as 20% for January orders. As a result of their increased costs for wire rod, concrete reinforcing manufacturers have notified their customers they will increase prices in early January. As of the date of this newsletter, none of the domestic concrete reinforcing wire mesh manufacturers have announced a firm date for their January price increase or notified their customers how much they will increase prices. Most analysts expect the price increase to be between 5-7%. As with rebar, if you have projects which require concrete reinforcing wire mesh, we strongly urge you to buy out these jobs as soon as possible.
Mar Mac Industries announced on December 4th that they will increase prices on their line of Contractor Building Products (imported) on January 1st as follows;
Tie Wire – 5%
Anchor Bolts – 10%
Bar Ties – 3%
Dowels – 10%
Merchant Coils – 5%
Nail Stakes – 5%
T Posts – 5%
Several other wholesalers of imported steel concrete accessories have announced price increases of like amounts for January. Keep this in mind when you are bidding projects which require these products.
Carpenter Company notified their customers on December 4th that they will increase prices on their entire line of expanded polystyrene foam insulations by 6% on January 2nd. Several other EPS insulation manufacturers also announced they will increase prices by a like amount in January. Increased raw material costs were cited as the reasons for the price increases by the manufacturers.
Although no manufacturer of extruded polystyrene insulations has announced a price increase, many analysts expect manufacturers to increase prices in the first quarter of 2018 due to their increased costs for resin. Be sure to get a quote from your New South sales representative if you are bidding any projects that specify extruded polystyrene insulation to ensure you will have the correct cost for your bid.
Due to strong demand, prices for Southern Yellow Pine dimensional lumber have risen each week since late November and prices for some sizes are now as much as 10% more than they were in mid-November, though most sizes and lengths are 3 to 5% higher. With several mills in the southeastern US closing down for maintenance the last week in December, prices are expected to increase into early January before leveling off and declining in mid to late January. Lead times are expected to increase for mill direct truckloads from the normal lead time of 10 to 14 days to as much as 3 weeks in January until supply matches demand after all the mills are back on line.
Masonry reinforcing and tie manufacturers have indicated they may increase prices in February or March due to the January wire rod price increase. It will depend on if the January wire rod price increase sticks. If it does, then masonry reinforcing manufacturers will increase prices no later than the first of March. If you are bidding any projects that require masonry reinforcing or ties that will ship after January 31st, be sure to get a quote from your New South sales representative.
Polyethylene resin manufacturers have notified their customers they will increase prices for January orders between $.04 and $05/LB. If the January resin price increase holds, polyethylene sheeting manufacturers have indicated they will increase prices by February 1st between 4 and 5%.
The producer price index (PPI) for final demand in November, not seasonally adjusted, increased 0.1% from October and 3.1% year-over-year from November 2016, the Bureau of Labor Statistics (BLS) reported on December 12. The AGC posted tables and an explanation focusing on construction prices and costs.
Click here for the latest update on the construction economy from Ken Simonson, the chief economist of the AGC.
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The Associate Profile this month is of J.P. Griffith, our Senior Sales Manager for South Carolina and Georgia. J.P. joined us last August after a 20+ year career in the lumber business with Carter Lumber and 84 Lumber where he was a Regional Vice President. He was born in Parkersburg, WV, graduated from Williamston High School, and received his Associates Degree from Ohio Valley University. He has been married to his wife, Kelly, for 29 years and they have a son, Cody (27) and a daughter, Katy (25). In his down time he enjoys riding his Harleys, playing golf, and spending time with his family. J. P. has brought several good ideas from the lumber business that have already made an impact on our business so we’re glad to have him on the team.
Our management article this month is: The Powerful Principle of Stopping to Propel Forward. Many times in our haste to hit deadlines we embark on a project without the proper planning. I’d recommend you give this a read.
December’s Management Article
The Powerful Principle Of Stopping To Propel Forward
By Dan Black
Great leaders are driven to perform and execute. There are times though that the best option for a leader is to stop. To practice the lost art of stopping and intentionally doing nothing to refocus on certain things that would propel them forward. Stopping to propel forward is less about physically going or doing and all about mental actions. If done on a regular basis the principle of stopping can actually position you to move forward and into new levels of success. Here are 4 reasons why every leader should stop on a regular basis.
1. Stop to plan
Leaders must balance proper planning with action. There are times when you should work and there are times when you should stop to plan and strategize. Proper planning allows for projects to be efficiently completed and launched. The key is that the larger the project or goal the more you need to plan. Stopping long enough to plan can excel the team and organization into new levels of success. Always remember the words of time management expert Alan Lakin stated, “Failing to plan is planning to fail.”
2. Stop to process
Leaders live in a fast pace work environment. The decisions leaders have to make and the answers they have to provide are expected to be given in a timely manner, often very quickly. In law enforcement and the military the decisions could be a matter of life and death. In the business world it means a significant gain or loses in sales and overall profits.
One decision could greatly impact the organizations future for either the good or bad. This is why it’s crucial to stop and process the decisions you are making, so you can determine the best option or choice. This is especially true when it comes to the high risk or critical decisions or answers you have to give. Stopping to process can excel you and the organization forward.
3. Stop to think
Thinking is one of the most valuable things a leader can do. Leaders who spend time thinking on a regular basis will always be exceling forward. In 6 Thinking Principles to Excel your Leadership I shared these principles that you should consider applying:
- The principle of deep thinking- Take time to really dig into and think about an idea or thought for an extend amount of time.
- The principle of big thinking- Think outside of your normal imagination and into the realm of your desired future or achievements.
- The principle of priority thinking- Focus your thinking time on the most important ideas or topics.
- The principle of strategic thinking- This allows you to properly plan and strategize about the next course of action.
- The principle of future thinking- Taking time to think about the future allows a leader to clarify and properly plan for the future.
- The principle of executing your thinking- This principle is about putting action to your thinking.
Stop and adapt these principles into your thinking time. It will allow you to excel forward in your leadership.
4. Stop to reflect
Author Peter Drucker wisely said, “Follow effective action with quiet reflection. From the quiet reflection will come even more effective action.” Before reflecting on outside factors you should consider reflecting on yourself. You should take time to reflect on your emotions, attitude, behaviors, and reactions. Ask yourself what you could have done better and what you could have done well in the situation. Once you have taken the proper amount of time to reflect inwardly you can then reflect on outside factors like: a team member’s performance, a problem or issue at hand, a current project, or the release of a product or service. Stopping to reflect can help you to propel forward.
Again, best wishes for the Christmas and Holiday Season. I hope you all will enjoy the holidays surrounded by family and friends and resting up for another big year in construction in 2018!
Author of The Real Business 101: Lessons From the Trenches
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