As I write this in late March is appears winter is over here in the South. We have also gotten a respite from the unusually high amounts of rain we have been dealing with since last July. Greenville, SC where our headquarters is located, and where I live, had 15 inches more rain than Seattle last year. Seattle is known as one of the wettest cities in America so that will tell you volumes about how rainy it has been here.
Forecasters seem united about calling for a slight slowdown in the economy this year but not a recession. As long as we avoid a recession I won’t complain about a little breather in the economy.
The only bright spot in this weather is that it has dampened (pun intended) the spate of price increases we have been dealing with. I think you’ll be happy to see what we are reporting below regarding pricing for the main products we sell.
The wet and cold weather through the beginning of March again took its toll on demand levels and material movement. Backlogs are as strong as ever, but the extreme weather has not allowed the construction market to fully kick into gear. On a positive note, customers, vendors, and manufacturers all agree that once the weather does finally break, business will begin to pop.
There has not been a lot of change in the commodity markets from late February through March. Lumber has seemed to stabilize from the dramatic swings of highs and lows that we saw in early February. Lumber trading and activity seems to be increasing over the past few weeks, but demand still is not where mills think it will be when the weather breaks and the backlog of jobs begin to start.
Polyethylene is another commodity item that has not seen much change over the past two months. Pricing continues to remain stable with very little issues on availability. The main concern regarding availability is the continued nationwide shortage of trucks. The spring produce season can put a strain on available trucking as produce producers in Florida will pay truckers more to move vegetables that can spoil than what is normally paid to haul building materials so we may see some extended lead times over the next few months.
Metal wire reinforcing again stayed level into and through March. Similar to lumber, the backlog for wire mesh remains strong but manufacturers are still waiting for the weather to break and kick into full gear. Mills are currently carrying moderate stock and seeing minimal issues on availability and lead times. When the spring and summer demand finally hits, expect to see lead times extend and availability to tighten up some.
The biggest change in the commodity market that occurred in March was with rebar. Extreme weather has had an effect on scrap collections throughout the country, and as a result, scrap supply has been tight. Mills domestically took notice of the tight supply and pending spring demand levels and pushed through an increase early March. All major mills pushed through a $20/ton increase that most suggest will stick through the spring and into summer. Depending on how high the demand levels reach through the spring and into summer, it would not be surprising to see another slight increase during that time. Even with domestic mills pushing through the $20/ton increase, import demand still remains low. Tariffs and high global scrap pricing are still keeping imported rebar from being a viable option versus domestic.
There were no other major price increases mentioned by manufacturers of construction material that have not been mentioned in previous newsletters.
The producer price index (PPI) for final demand in February, not seasonally adjusted, increased 0.3% from January and 1.9% y/y from February 2018, the Bureau of Labor Statistics (BLS) reported on March 13. 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 Spotlight this month is shining on Sheldon Barnes, an inside sales representative in our Hardeeville (Hilton Head/Savannah area) branch. Sheldon was born in Lawton, Oklahoma and graduated from high school at the Bradwell Institute in Hinesville, Georgia. He graduated from Savannah State University with a degree in Homeland Security and Emergency Management. He and his girlfriend Chelsey have a four-year-old daughter. In his down time he enjoys spending time with his family and going to the gym. After graduating from Savannah State he first worked in the repo department at Rent-A-Center and did loss prevention at Ross Stores. He went to driving school to obtain a class A CDL and he drove over the road for 11 months with CRST before joining us in July 2016 is a driver. After excelling as a driver we promoted him to inside sales last year where he has been doing a great job. If you interact with Sheldon at all you will know that he exemplifies our “can-do” attitude.
Our management article this month is entitled; Management and Leadership are Different Things. A lot of people confuse management and leadership so I think most will find this article helpful.
March’s Management Article
Management and Leadership are Different Things
By Steve Keating
Some of you will find this article lacking. You’ll find it off the mark because you believe that management and leadership are one in the same. You are convinced they are two words that describe the identical characteristics and skills.
Before I write this next sentence I should remind you that I was a longtime member of the Dale Carnegie organization. I believe in and try to practice the principles set forth in the all-time great book written by Mr. Carnegie, “How to Win Friends and Influence People.”
One of the principles says to never tell a person they are wrong. That is the principle I’m going to violate in this next sentence. I’m going to violate it because this is so important that I want to say it as directly as I can. So here we go…
If you believe that management and leadership are identical then you are wrong. You’re about as wrong as wrong can be.
Let’s be clear, all organizations need both management and leadership. The same person can and frequently does possess both skill sets. But many times, they do not. When they don’t it is usually the leadership skills that are missing.
When leadership is lacking in any organization then managing fills the gap. That creates a multitude of issues within the organization because human beings resist being managed. They insist on being led.
We manage things, things like budgets, buildings, inventories, etc. Things don’t care if you are ethical. Things don’t know if you say one thing and do another. Things don’t know if you’re abusing them or not. Things don’t get hurt feelings when you use or trust one of them more than the other. Things don’t care if you care for them or not. Things don’t get emotional…ever.
Human beings have been known to be emotional. A leader interacts with another human being’s life. When you are involved with another person’s life and have any level of influence on it then that person wants to know if you care for them. They insist that you are ethical and fair. They need to feel trusted. They need to know they matter. They need to be recognized for their efforts.
Showing you care, ethical behavior, trust building integrity, showing people they matter, and providing consistent recognition are all leadership characteristics.
When you apply management principles to situations where you should be showing leadership characteristics you often make the situation worse. That’s why it is so important to understand the difference between managing and leading. Too many people in leadership positions lack leadership skills. Often they are not even aware of it. They unknowingly fill that gap by trying to manage people.
Research shows that between 70 and 80 percent of people in leadership positions have fewer than 5 hours of formal leadership training. Many have absolutely none. Companies that wouldn’t think of allowing their people to do “things” without training regularly put people in charge of their greatest asset (people) with no training at all.
That’s crazy when you think about it. But it seems that many organizations don’t think about it.
Leaders who lead people instead of managing them eliminate most “people issues” before they begin. Don’t make the all too common mistake of thinking that management and leadership are interchangeable words. They are vastly different skill sets and so are the results that people will provide their organization when they are led instead of managed.
That’s it for this month. As always, thank you for your business and we look forward to serving you when things break wide open (hopefully) in a month or two.
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