It appears (knock wood) that the rainy weather that has plagued us since last July has ended, at least for the last two weeks. Many jobs that have been delayed for up to nine months or more due to job sites being too wet are now underway. I hope this is behind us.
The economy is chugging along and we are now in the tenth year of the post-Great Recession recovery. With good fiscal policy and less partisan bickering (one can hope, can’t one?) in DC we may be able to keep avoiding a recession. There is no law that says we have to have a recession. Did you know that Australia is now in their 27thyear without a recession? If they can manage their economy to avoid recessions, why can’t we?
The only good thing about the wet weather has been that it has continued to mitigate price increases. See below for an in-depth look at pricing trends.
The month of May has brought drier weather across the Carolinas and Georgia. With the drier weather, the ever-mounting backlog of work from January through March is beginning to shake loose and job starts are happening all over the region. With the increase in activity there are a few items to note moving through May and into the busy summer season.
Most major commodity items stayed flat again over the past month. Chicago Shredded Scrap again posted down after the first week of May and the mills are now trying to evaluate the change in scrap price with the current levels of demand to decide where the market will go. It would be safe to assume that rebar prices should hold steady or possibly slightly decrease over the coming months. Demand levels again will be one of the most important factors. If demand stays high, prices should stay flat, but if demand begins to slack, prices may fall to move inventory.
There has been a change with regards to import rebar coming into the country. Turkey, a major supplier of import rebar in the United States, had a reduction in tariffs implemented from the current US administration. The US announced a decrease from the previous 50% that was imposed for political reasons last year, to a 25% rate now. The 50% rate imposed in the fall of 2018 virtually eliminated Turkish bar from consideration domestically, but the new reduction in tariff rates at least gives some hope for import brokers.
Reinforcing wire mesh pricing has also stayed flat over the past four weeks. Mills are currently operating with adequate stock and at high production rates, so lead times have decreased slightly since last reported. The only reason for extended lead times seem to be coming on the trucking side. With the continued nationwide shortage of available drivers, transportation of material still seems to be an issue for manufacturers located all across the country.
Lumber continues to bounce along with prices fluctuating up and down weekly, but not by great amounts. It seems for every hot week of lumber sales, a slow, low demand week follows. Hopes are still high for a positive summer, but again those are mainly built upon the large backlog of work building from the past few months.
You can also add poly sheeting to the list of commodities with no change over the past few weeks. Even with the recent fluctuations in oil, poly pricing and availability continues to hold steady.
With little change in commodity pricing recently, it may be a good idea to jump on some stock purchases to beef up inventory levels before the potential volatility of summer prices and demand levels.
There were no major price increase announcements from our construction material manufacturers.
Contractors appear to be closing the gap between rising input costs and bid prices, based on the latest Producer Price indexes (PPIs). 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—increased 1.4% in April from March and 5.6% year-over-year (y/y) from April 2018, the Bureau of Labor Statistics (BLS) reported on May 9.
Click here for the latest update on the construction economy from Ken Simonson, the chief economist of the AGC.
Our featured suppliers this month are:
- Simpson Strong-Tie
- Access Tile
Our associate profile this month is of James Vogt, our Director of Sales.
Our management article this month is entitled, Great Leaders Need to Learn How to Delegate. Many people get promoted into management but have trouble learning how to delegate. Check out this article for some good tips if you’re struggling with this.