26 Feb February 2018 Newsletter
After an unusually cold and snowy January the weather has improved somewhat this month. After some pretty intense gyrations earlier this month the stock market appears to be resuming its upward climb. President Trump unveiled his infrastructure plan recently but, I for one was not impressed. I believe that it was less than desired because of the giveaways the Republicans made to get Democrats to go along with the government spending plan so that the government shutdown would end quickly. I don’t know about you, but I am very concerned that our federal government debt is over $10 trillion and growing rapidly. If any of us ran our businesses the way our elected officials run our government we would be bankrupt. Unlike them, we can’t print money any time we need it.
Despite all the government shenanigans the construction economy continues to grow. So much so that price increases have become rampant as of late. Fuel surcharges are also being announced by most of our suppliers on regular basis. There is a nationwide shortage of truck drivers so trucking companies are stealing drivers from each other by paying ever increasing wages and even signing bonuses. This has contributed to a spate of vendor price increases. See below for more information.
As has been the trend over the past few months, several manufacturers of construction materials we distribute either increased prices or announced future price increases in February. Major price increases for steel and aluminum products in April may be a possibility, as on February 16th, Commerce Secretary Wilbur Ross released reports on the U.S. Department of Commerce’s investigations into the impact on our national security from imports of steel mill products and from imports of wrought and unwrought aluminum and the department’s recommendations to President Trump. These investigations were carried out under Section 232 of the Trade Expansion Act of 1962, as amended. The following is a summary of the report:
Recommendations of the Steel Report:
For the third consecutive month in February, domestic rebar mills increased prices. CMC announced a $25/ton price increase on February 9th, effective immediately and Nucor, Gerdau Ameristeel, and other mills in the southeast announced a $25/ton price increase on February 12th. Steel brokers which own the limited amount of imported rebar at ports in the southeast also increased prices just after the domestic mills announced their price increases. As in January, most analysts expect domestic mills to increase prices again in early March. Consider buying out any projects you have that require rebar as soon as possible to avoid paying even higher prices in the spring.
Concrete reinforcing wire mesh manufacturers will increase prices by approximately $45/ton the last week in February. This is the second industry wide price increase in three months and indications are that mills will increase prices again in March or early April, as wire rod manufacturers have announced price increases for March orders between $45 and $60//ton. As with rebar, we strongly urge you to buy out any projects that require concrete reinforcing wire mesh as soon as possible.
R Max announced a 6% price increase on all polyisocyanurate insulations and a $.10/sf adder for Coated Glass Facer products effective February 14th. All orders must ship no later than March 1, 2018 to be invoiced at prices prior to their price increase.
Specified Technologies, Inc., a leading manufacturer of firestopping products, announced an across the board price increase of a maximum of 5% effective April 1st.
Both Sonoco Products Company and Caraustar Industries announced an 8% price increase on concrete forming tubes for March. Sonoco’s price increase is effective March 1st and Caraustar’s price increase is effective March 12th. Both companies cited increased costs for raw materials, chemicals, and transportation costs as the reasons for their price increases.
Several manufacturers of polypropylene erosion control products increased prices in February by as much as 15% while others will increase prices in March. Recent increases in their costs for resins, higher production costs, and increased transportation costs were cited by all as the reasons why their price increases are necessary.
Dow Building Solutions, a division of The Dow Chemical Company, announced on February 7th a price increase of 3% for all polyisocyanurate wall insulations effective March 9th. All orders must be placed on or before February 27th and shipped by March 8thin order to be invoiced at prices prior to the March 9th price increase.
Giant Cement will increase prices on April 1st on their entire line of Portland cement and masonry cements as follows:
Bulk Cements – $10.00/short ton
Due to the advanced price increase notice, Giant will offer no price protection for orders shipped after March 31st.
Prices for southern yellow pine and spruce dimensional lumber have risen steadily since late January and are expected to continue to increase each week into March and perhaps April, due to high demand. Most analysts predict prices will increase between 5 and 7% in March depending on the grade and size. If you have projects which require these products, we strongly urge you to buy them out as soon as possible to avoid paying higher prices in the weeks to come.
On January 28th, Drew Foam Companies, notified their distributors that they will implement an across the board 6% price increase on all expanded polystyrene insulations
Quad-Lock Building Systems, a leading manufacturer of ICF wall systems will increase prices by 5.75% effective March 15th on all ICF wall panels only. They will not increase prices on ties and related products. The net price increase will average approximately 5% sf for their ICF walls systems. As with Drew Foam Companies, Quad-Lock cited the recent styrene resins price increase for the necessity of their March price increase.
The producer price index (PPhttps://www.agc.org/learn/construction-dataI) for final demand in January, not seasonally adjusted, increased 0.6% from December and 2.7% year-over-year (y/y) from January 2017, the Bureau of Labor Statistics (BLS) reportedon February 15. 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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Our Associate Profile this month is of James Finch, our Charlotte Operations Manager. James was born in New York City and graduated from high school at Westminster Academy in Fort Lauderdale, FL. He received his Bachelor of Arts degree at Indiana University and his MBA from Clemson University. James is single and enjoys playing golf, spending time with family, and watching Indiana basketball and Clemson football. James joined us after being with Aflac and DynCorp International where he was employed within the US and overseas in Iraq. James recruited and directed Local Nationals through the vetting process of becoming security personnel for the US Consulate in Irbil, Iraq. James started with us last April in our Manager in Training program and was recently promoted to Operations Manager in Charlotte. His energy and enthusiasm have already made a significant impact on our Charlotte branch.
Our management article this month is, Are You Ready for the Millennial Invasion? As the construction industry workforce is graying we need to replace those who are retiring. Managing millennial’s is different than managing older workers in many ways. Hopefully, this article will give you some tips you can put to work immediately.
February’s Management Article
Are You Ready for the Millennial Invasion?
By the year 2025, 75% of the workforce will consist of Millennials. With this rapidly growing demographic, many employers are finding themselves face to face with an evolving work culture: What once motivated Baby Boomers and Gen Xers doesn’t quite fit the bill for today’s working Millennials. Across many industries, employers are finding challenges in innovative and effective ways for both how they recruit Millennials and how to retain them in the workplace. Are you ready for the Millennial Invasion?
Meet Dave Shrigley, a Business Development Manager at Revere Electric Supply. Dave shared his concerns with me about the challenges of attracting a younger workforce to the construction industry. What made this conversation so insightful is the fact that Dave himself is a Millennial—at the age of 29!
Dave is a graduate of the first apprentice class at Revere Electric. The Revere Sales Apprentice Program is a multi-phase program designed to bring entry-level personnel into the company while developing and advancing talent to become Account Representatives at the end of an approximately two-year period. Joining the program after graduating from Augustana College, Dave readily admits that the construction industry wasn’t a top career choice or even one he had given thought to. However, it was Revere’s recruitment and potential opportunities offered that ultimately spiked his interest.
As employers, we constantly hear stories about how Millennials jump from one job to another, usually not staying with a company for more than two years. Contrary to that notion, Dave is in his seventh year at Revere, and most of the Millennials who have joined Revere have stayed with the company. Why? Dave says that his satisfaction derives from receiving continually increased responsibilities, great mentoring programs and professional development opportunities.
However, like any company looking to improve its retention and grow its talent pool, Revere took notice of those who had left the company and began exploring why Millennials would leave Revere for other opportunities. Through research, the company discovered that many of Revere’s recruits had limited or no ties to the region, and therefore, no real reason to stay in the area. With this information, Revere turned its attention toward identifying potential hires from surrounding colleges in Illinois and Wisconsin, such as Augustana, Illinois Wesleyan, Carthage and many others that now serve as fertile ground for Revere’s recruitment efforts. In addition, Revere works with Handshake, a site shared by hundreds of colleges where approved employers can post jobs and search résumés for potential candidates.
While Revere participates in traditional college fairs, the company also schedules time in the college classroom to introduce the company to graduating students. Revere provides an overview of the company and of the construction industry. Revere has found that these classroom visits also provide a great opportunity to engage with students, gaining greater insight into what Millennials are seeking in a prospective employer. Through the classroom approach, Revere has learned the following:
Noting that the interest in social causes and living with purpose are growing trends, Dave emphasized the importance of organization health. Millennials are interested in teamwork and they thrive on mentorship and collaboration. They want coaches and meaningful relationships where the association of “colleagues” is synonymous with “friendship.” Perhaps most importantly, Millennials need to be shown a plan for their career. As Dave points out, “Millennials want to move faster, have more responsibility as well as a vision for where their career is heading.” Once you have recruited your team of Millennials, pay attention to the onboarding process. Set expectations early and communicate clearly the steps that are needed to succeed in your company.
The great thing about every new generation is that each of us is given the opportunity to learn, grow and improve daily, while at the same time to discover new ideas that strengthen the industry. Imagine what your company could learn by implementing tactics like those in Revere’s recruitment strategy!
In closing, if you haven’t seen our YouTube site lately please check it out. We have added a lot of “how-to” videos showing how to use many of the products we sell. Check it out: https://www.youtube.com/channel/UCSht1XD0fkSbhj_ABOtbEWg
Author of The Real Business 101: Lessons From the Trenches