July 2020 Newsletter

July 2020 Newsletter


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New South News

Hi all –

What a month July has been. All nine New South Construction Branches continue to remain busy, and we are grateful for our loyal customers and vendors who continue to support us, especially during the Covid-19 circumstances. Please remember all branches remain open with safety modifications in place. At our branches, you’ll find we have plexiglass up, hand sanitizer stations, masks on and more — and we are even selling some of these products. Take a look at our newest NSCS branded masks that we just had made:

We have extras, so email me at jim.sobeck@newsouthsupply.com if you want a New South Construction Supply mask.

During these times, I also want to give a shout out to the incredible associates at New South. We’re now up to 87 associates with the hiring of five new associates at the start of the summer. This leads me to my next exciting announcement: New South Construction Supply has been named a “Best Place to Work in SC” for the fourth time in recent years. This survey-and-awards program was designed to identify, recognize, and honor the best employers in the state of South Carolina, benefiting the state, economy, workforce and business. The list is made up of 74 total companies, and NSCS is proud to be on this list with many of our customers. I take great pride in this award, and we could not do it without our people. Click here to read our full blog post and press release on this award.

Since the beginning of Covid, I have had many people reach out asking me about the virus’ effects on the construction industry. With no end in apparent sight, New South Construction Supply is remaining vigilant and we are thankful to have not been affected. Federal stimulus money appears to be helping and some areas of construction are booming, namely single-family housing. On July 24, experts were stunned to see that new home sales were up in June versus May by 13.8% compared to a consensus estimate of 3.8%. New home sales are up 89% in the northeast as urban flight appears to be a real thing. I personally know of two expensive home sales in my hometown that were purchased by people leaving the northeast as it is hard to social distance there considering the population density. Also, there is a boom in e-commerce distribution centers — that is expected to continue as well. Multifamily and hotel construction is on pause, at least for now. Last, with interest rates being the lowest they have been in years, we are hopeful this will positively affect the construction and real estate economies through the end of Covid.

For a detailed look at pricing trends, see below:

As summer continues to roll along and the rains seem to have subsided from the wet spring levels, we have seen some interesting happenings within the construction commodity markets. Stability remains within the metal markets for now, but lumber pricing has exploded over the past month. More specific detail to follow below.

Rebar has continued to remain stable with no major change since our last newsletter. Demand has been steady, but not at the projected summer levels that were made before the COVID-19 crisis happened. Where the demand has been impacted the most is in commercial work. With many larger projects being pushed back or placed on hold, the need for large volume rebar on commercial projects is way below what was anticipated for 2020. On the flip side, residential work has seen a growth since the pandemic occurred. The growth in the residential market is wonderful to see, but the growth in residential rebar volume has not been enough to offset the decrease in commercial volume. As a result, inventory has been more readily available. This free availability and scrap prices not jumping have been major factors in keeping prices steady over the past two months.

Wire Mesh is much the same as rebar. There has not been any significant change over the past month with current availability being strong, but the mills are beginning to report more activity. More activity is usually an indicator that pricing will either hold steady or move north if the pattern continues for an extended period of time. Another potential impact on future wire mesh pricing is a pending petition filed by five major domestic mills regarding import wire from Mexico. This is something we are monitoring closely and will update as more information becomes available.

Polyethylene sheeting has been stable for almost a year now, but we are now beginning to hear some potential for price increase notices to come through. One major domestic manufacturer has already done so and plans to implement an approximately 5% price increase beginning in August. This is the only firm price increase we have seen so far, but there are rumors that other poly manufacturers may follow in the coming weeks. If you are looking to replenish your poly sheeting stock, the next two weeks would be a good time to do so.

Lumber…. where to begin? After many conversations with brokers, wholesalers, and distributors, the general consensus is that no one has seen a lumber market like our current one in twenty plus years. A full ten pages could be written on the current lumber market, but a picture may still do it more justice. Below is a graph pulled from TradingEconomics.com illustrating overall lumber pricing over the past few months.

This graph illustrates just how much the market has climbed since April of this year. Availability has been stretched beyond thin and lead times are stretching out to over a month on loads available. No quotes on loads are now a common theme and we have seen prices double on common sizes such as 2×4’s, 2×8’s, and 2×10’s in just the past three weeks. To say the mill curtailment implemented earlier this year has had the desired effect on lumber pricing would be a gross understatement. The million-dollar question (billion-dollar question may be more appropriate) is how long can this climb last? If we figure this out before the rest of the market, we may be writing next month’s newsletter from a beachside cabana. In all seriousness, most brokers, wholesalers, and distributors are saying this climb still has some legs. We are actively trying to stay in front of this market and can ensure you we are working every day to obtain the best numbers we can for our customers.

Divergent trends are emerging for construction costs, as indicated by producer price indexes (PPIs) for June that the Bureau of Labor Statistics (BLS) posted on July 10.. AGC posted tables showing PPI’s 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—declined 0.3% for the month, following a 0.1% dip in May. The year-over-year (y/y) increase of 2.2% compared with a rise of 5.5% a year earlier and was the smallest y/y increase since June 2017.

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

“Catching up with our Customers”

Scott and Tony Griffin of Griffin Masonry Inc. are this month’s featured customers in our Catching up with our Customers series. New South Construction Supply has worked with Scott and Tony for years, and their business of 25 years prides itself on providing the absolute highest quality in products, customer service, and craftsmanship in the marketplace.

During our Q&A, Scott and Tony detailed how they focus on the vision and future of the company daily, and that their culture is to challenge the norm and seek to improve. Whether their clients are a first-time homeowner or a local celebrity building a dream mansion, Tony and Scott pride themselves on treating every job equally, and are honored to help everyone build their home. Griffin Masonry also excels when it comes to more difficult jobs, and that is due to the skill of the workforce they have.

Read the full Q&A with Scott and Tony here, and learn more about their business by visiting www.griffinmasonry.com.


Featured Manufacturers

SpecChem

Makers of Chemicals and Aggregates for the Concrete Industry

 

Raven

Producer of construction films – poly, vapor barriers, and liners

J.D. Russell

Manufacturers and distributors of quality construction materials and landscape edging products.

click image below for full sized ad!


Associate Profile


Jonathan Mouw
Manager in Training, North Charleston, SC

Our Associate Spotlight this month is of Jonathan Mouw, a Manager in Training working in our N. Charleston, SC branch. Jonathan was born in San Antonio, TX and graduated from Creekview High School in Canton (Atlanta area), GA. He then accepted a baseball scholarship to Furman University in Greenville, SC where he was a relief pitcher. After earning his Business Administration degree, he joined us at our Greenville, SC branch in January 2020 as a Manager in Training until he was transferred to N. Charleston. Jonathan enjoys playing golf when he has time. He did a great job in Greenville and has already proven to be a great addition to our N. Charleston team.

This month’s leadership article is “Weasel words” send a bad message to colleagues and clients. This article is taken from my book, The Real Business 101: Lessons from the Trenches, and most recently was featured in my monthly column in the Upstate Business Journal.

“Weasel words” are words people use to weasel out of a commitment or to avoid responsibility for something. Click here for the full article in the Upstate Business Journal of the weasel words that bug me the most.


“Weasel words” send a bad message to colleagues and clients

By Jim Sobeck
 

“Weasel words” are words people use to weasel out of a commitment or to avoid responsibility for something. Some of the weasel words that bug me the most are:

“To be perfectly honest with you.” I have always hated that phrase. To me it says that the person I’m speaking with has not been honest with me until that point, and it doesn’t instill confidence in me that they are telling the truth after they use that phrase.

“The powers that be.” This one always drives me nuts. I hear this a lot from people who don’t want to take responsibility and hide behind that phrase. Example: “I agree with you, but the powers that be won’t let me do it.”

“I haven’t found the time.” I hear this a lot from people who have missed a due date. I tell these people: Time is never found, it is made. When someone says, “I haven’t found the time,” I correct them and say, “You haven’t made the time.”

“It fell through the cracks.” This phrase makes my skin crawl, because any effective person has a follow-up system so that they don’t forget to do important things. You can put a task in a tool such as Microsoft Outlook and forget about it because the tool will remind you when it needs to be done. When I hear this phrase, I know I am dealing with an amateur.

“I couldn’t find any way to contact her.” When I hear this, I normally go right to Google and find a way to contact the person in question in a matter of seconds. These weasel words tell me that the person I’m speaking with didn’t even try.

“That’s not my job.” These are the weasel words that aggravate me the most. They indicate a person who is not committed to his job. As I tell my coworkers: “Anything I ask you to do is your job as long as it is legal, ethical and moral.” I also tell people I interview that the phrase “That’s not my job” will get them fired.

“We’ve never done it that way.” The speaker may as well just say, “I have no interest in trying to accommodate your needs. Go away.” Our company’s unofficial motto is: “The answer is yes; now, what was the question?” Which would you rather hear?

“That’s not our policy.” When a customer hears those words, he immediately braces for a negative experience. I coach our associates to avoid using the word “policy” because of its negative connotations. It’s much better to say something like, “That’s not our usual practice, but we will make an exception for you.” That way the customer knows an exception is being made for him and that your company values him as a customer.

“Hope you are well.” This ubiquitous phrase is the e-mail equivalent of asking “How are you?” in a face-to-face conversation. I don’t think the person asking really cares in either situation.

“Thx.” To me, it is the ultimate in laziness to put “Thx” at the end of an e-mail. It only requires three more keystrokes to say “Thanks” — or better yet, six more keystrokes to say “Thank you” — at the end of your correspondence.

I guess that since Andy Rooney has passed away, I am applying for his position of curmudgeon-in-chief. Am I being too picky? What say you?


That’s it for this month. As always, thank you for your continued business and support.

Best regards,

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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