December 2020 Newsletter

Dear Friends,

First off, Merry Christmas, Happy Holidays, and best wishes for the New Year! While this has been a most unusual year, the construction industry has been one of the few beneficiaries of the pandemic. Urban flight has been good for residential construction in the South and late adopters of eCommerce have caused a building frenzy of eCommerce distribution centers and data centers. Interest rates and mortgage rates remain at record lows, further fueling construction, especially among Millennials or Boomers. COVID-19 vaccines are now available, and we are hopeful to be back to normal no later than mid-2021. Congress is also talking about an infrastructure bill and an additional stimulus program next year. All of that bodes well for the construction industry; however, it has led to serious price inflation in some products. See below for details.

Rebar pricing has exploded since our last newsletter. All three major mills have pushed through price increases totaling $95 per ton. The first increase of $30 per ton hit right before Thanksgiving and an even larger increase of $65 was pushed through just two weeks later. Shortage of scrap metal availability and large international purchases of US scrap have put major strains on the supply chain. Brokers are estimating the scrap inventory deficit will take more than 60 days to correct and expect this run of high-priced scrap to continue running through February. Expect domestic rebar to remain high for the next few months with a possibility of more increases. The dramatic rise in pricing is not just impacting domestic steel; imported rebar pricing is increasing faster than domestic rebar pricing.

Spring import prices are higher than current domestic prices and expect to remain that way until international raw materials pricing settles below domestic pricing. Wire mesh followed a similar pattern and mills pushed through another price increase on welded wire reinforcing mesh. This second round of increases by all three major southeast mills took place during the weeks of December 14th and December 21st resulting in a $100 per ton increase from previous pricing. Expectations are for wire mesh to continue at this new level through January, but we are continuing to monitor for potential increases in the near future.

Just as we thought lumber was settling, the market takes off again. There has been a sharp increase in demand over the past few weeks and that demand is driving pricing northwards. Lead times are again being stretched out three or four weeks, as mills struggle to produce enough material to fulfill orders already on the books. Available loads of #3 grade lumber in 2×4’s and 2×8’s are scarce and have currently been selling 10-15% higher than where they were a month ago. After speaking with some lumber brokers, there is no expectation for pricing to soften through the first quarter. Some brokers have stated that these new levels will most likely become the norm moving forward with pre-pandemic pricing levels being history.

Polyethylene has remained stable over the last month with regards to pricing. The price increase pushed through a few months ago has stuck and there are no signs of a reduction in the near future. Demand remains strong for poly and lead times continue to be three to four weeks.

Here are a few price increase notices that were sent out this month:

Master Builders Solutions, a leading manufacturer of construction chemicals and repair products, released a price increase notice effective February 1st, 2021. The range of increase will vary across product categories, but all product categories will see a price increase. All orders placed and shipped prior to February 1st will reflect the current pricing.

ABT, Inc. has also sent notice for an upcoming price increase. This price increase will be implemented on January 1st, 2021 and will impact all products. ABT lists significant increases in raw materials and transportation costs as the main causes of the price increase.

Drew Foam Companies, Inc., a manufacturer of foam for a variety of insulation applications, has announced a 6% increase on all products effective January 4th, 2021. They listed raw material cost increases, packaging cost increases, and COVID-19 related costs as the reason to implement a price increase.

York Flashings announced a price increase on December 11th, 2020 that took immediate effect on all orders placed after that date. Copper flashing was the highest increase of 9%-12%, followed by Rubberized asphalt peel and stick products of 3%-5%, and lastly stainless-steel flashing that saw a 2%-4% increase.

A cost squeeze for contractors eased slightly in November as 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—inched up 0.1% October, while the PPI for inputs to new nonresidential construction held steady after six months of increases, the Bureau of Labor Statistics (BLS) reported today. AGC posted tables 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 installment of our Catching up with our Customers series, we are interviewing Harby Moses Jr., who formed Coastal Structures Corporation in 1990. Based out of Georgetown, SC (on the South Carolina coast), Coastal Structures is a mid-size, full-service contractor that provides unmatched commercial construction services around an 80-mile radius of their headquarters. Having been in business more than 25 years, the company maintains the highest standards of quality, service, and commitment to meeting the expectations of their clients. Read about the company’s mission, employees, featured projects, and how they stand out among their competitors by reading the five minute Q&A here.

Featured Manufacturers

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.

Spyder

Manufacturer of blades and attachments that work as long and hard as you do

Makita

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

Associate Profile

Felipe “Fil” Amaral
Rebar Estimator/Detailer, Myrtle Beach

This month’s associate profile is of Felipe “Fil” Amaral, a rebar estimator/detailer based out of our Myrtle Beach, SC branch. Fil was born in Portugal and graduated from James Madison High School in Vienna, VA. He then got a Bachelor of Science degree in Mechanical Engineering from Virginia Commonwealth University in Richmond, VA. He is married with two sons and enjoys video gaming, fishing, gardening, cars and the beach. Prior to joining us last August, he worked for two other rebar fabricators. The way our rebar fabrication business has grown, it has been great to have another in house estimator/detailer.

As in the past, rather than send greeting cards, we made a donation to the Make-A-Wish Foundation in the name of all of our customers. The Make-A-Wish Foundation is something that everyone can get behind as they grant wishes to children with life-threatening illnesses.

Our leadership article this month is, Are You Working on You? Questions for Improving the Quality of Your Leadership. There is no finish line and all of us in leadership positions can always get better. I picked up several new tips from this article and I bet you will as well.

Are you working on you? Questions for improving the quality of your leadership

By John R. Stoker

Here are a number of questions you may consider to improve your awareness and the quality of your leadership:

1. “Are people motivated to follow you?” And, additionally, “How do you know they are motivated?” Taking a moment to identify how people are responding to you may help you make needed adjustments to how you are managing them.

2. “Do people seek your perspective or insights?” Your answer to this question may help identify how approachable you are. If no one is asking for your input, you might assess how you respond to others, especially when things don’t go as planned. You might also examine how you respond to questions, concerns and needs.

3. “How open am I to different perspectives about tough issues?” If no one disagrees with you or offers alternate ways of looking at challenges, then you might consider how you react when people respond in a contrary way. If you don’t take charge of your feelings and seek understanding when others disagree, people will usually stop offering differing viewpoints for fear of negative consequences.

4. “What situations or feedback cause me to get defensive?” If you can identify the situations that may trigger a negative reaction from you and explore why you tend to respond that way, then you can manage your responses more effectively and objectively.

5. “Why do I take certain situations personally?” This question is really about identifying your personal values. Whenever we perceive that an important value is about to be challenged or called into question, we often respond emotionally. If you find yourself responding combatively or negatively, you might ask yourself, “What did I want?” or “What expectations were violated?” The answer to these questions will help you understand the reasons for your negative emotional reactions.

6. “How does my communication style affect others?” I have had people tell me after a presentation that their manager sent them to the event so I could fix them. What that really tells me is that the person and their manager have different styles for communicating. These style differences often become the source of disagreement and contention. Understanding your communication style and the styles of others will help you interact in an effective way, establish rapport and avoid misunderstandings.

7. “How does my mood or state of mind influence the decision-making of others?” You could just as easily ask how your mood or state of mind influences the performance of others. People will watch you and how you engage with and interact with others. If they observe any behavior that may be interpreted negatively, they will avoid interacting with you until they deem it is “safe.” Unfortunately, this may lead to delays and other problems that could cause adverse outcomes.

The converse is also true. If people know they can come to you with questions and concerns and are responded to in a positive way, they won’t hesitate to communicate with you.

8. “Do people view me as negative and cynical or positive and passionate?” Most of us don’t enjoy being around folks who are negative. If you don’t know how you come across to others, perhaps you should ask for feedback from someone who will tell you the truth. We don’t often see ourselves as we are seen, so acquiring a more objective perspective can be invaluable in relating to, connecting with, and leading others.

9. “What personal characteristics of others bother me the most?” Answering this question will help you develop your emotional intelligence and will help you avoid a negative reaction to those that might display a particular characteristic or behavior. Once you have identified that which may bother you, be more aware when interacting in those situations or with those people. Do a little preemptive preparation by recognizing how you might react and how you want to react.

10. “Do I make negative assumptions or judgments of others, or do I give others the benefit of the doubt?” You may make negative assumptions of others if you have a past negative history with them or someone like them. The challenge in this situation is to recognize this characteristic and stop yourself before you take action. This is not easy because we often make assumptions without even realizing we are doing so.

One easy tool for helping in this area is to use your negative feelings as a cueing mechanism to identify the thinking behind your feelings. Another activity you might apply is to recognize the assumptions you are making and ask yourself if there are data or evidence that logically supports your assumptions. In the absence of any logical basis for your thinking, then you must recognize that your thinking is just that — your thinking.

These are just a few ideas of questions you might consider as you give thought to your experience as a leader. Answering these particular questions will help clarify your current results, assess the quality of your leadership, and increase awareness of the condition of your relationships. Taking the time to contemplate how you are interacting with others and how they are responding to you will help you in important ways to become a stronger, more effective leader.

That’s it for this year. I know we all can’t wait to see 2020 in the rear view mirror. I’m excited for a return to normalcy in 2021. As always, thank you for your support of New South Construction Supply and best wishes for the holiday season.

Best wishes,

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