May 2022 Newsletter

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New South News

Dear Friends,

As I write this in late May, construction remains one of the strongest parts of the US economy. All our divisions are firing on all cylinders, and we expect this to be the case through the end of this year. Next year isn’t as clear but we remain hopeful that business will remain strong.

We continue to set records every month. Our tilt up backlog is now into October and we are getting new RFP’s every day. Out biggest challenge now is hiring enough people to handle demand. We have 12 open positions right now and we’d appreciate your help in filling these openings. See for our current available positions.

Last month, we announced we signed a Letter of Intent to acquire American Contractors Supply, based in Atlanta. I am disappointed to tell you that they had a change of heart and terminated the acquisition. We are still friends and hope to close this acquisition when the time is right for them. Selling a company is very emotional for founders, we respect their decision in not going forward with the acquisition at this time.

Despite the strong market, commodity prices have mostly remained stable. See below for a closer look at pricing trends for the main products we sell.

As construction season enters the busy season, commodity prices have had minimal changes since April. With the potential of finding some relief this summer from a two-year run of massive price increases on commodity-based items, buyers are cautious to stockpile or go long on many of the commodities we distribute.

Rebar demand remains strong through May, and the $2.00/CWT increase on 20’ stock bar, in April is holding firm for now. Mills are reporting all May rollings are booked and much of the rollings scheduled for June are also booking up quickly. With demand high, availability remains an issue and is allowing the domestic mills to stick with the elevated pricing. The opportunity for the market to soften has everything to do with the reemergence of import offerings and falling scrap metal pricing. Turkish rebar pricing has reduced to levels that now offer competition to domestic mills. Domestic mills are holding firm on current pricing stating demand is too great to see a price decrease, but with scrap metal decreasing and now competition from importers; wholesalers, distributors, and large-scale fabricators are hesitant to stock up on material. We do not predict a change in pricing in May, but the potential for reduction in June or July feels plausible. Domestic mills will not lower pricing easily or quickly, so the potential market shift should not be as extreme as it was on the way up.

Wire mesh pricing remains flat from April. The availability of wire mesh has begun to improve, with lead times being quoted in weeks instead of months. Mills, having caught up on back orders, have been able to build sitting inventory over the past few months. While pricing has not moved with the increased availability, we will continue to monitor the scrap metal market for indicators. If mill sitting inventory continues to build and scrap prices continue to reduce, we may see some relief on pricing in the coming months.

Lumber remains on the low side of the market again for the month of May. Many brokers and distributors do not feel the lumber market has hit bottom and are being extremely cautious when buying inventory. This cautious buying is keeping pricing suppressed with mills actively looking to move material. Loads are being bought and sold near print, with some willingness from the mills to negotiate on pricing depending on size and volume of need.

Poly sheeting was one of the few commodities to see a recent increase as poly manufacturers pushed through a 4-7% increase in mid-April. The market appears to have accepted this increase with little pushback from buyers. With availability being stretched back out to 4-5 weeks, pricing is a secondary concern compared to availability. Longer lead times bring heavier purchases within the industry, which in turn creates even longer lead times. With oil pricing and lead times remaining high, we expect poly pricing to increase and availability to decrease.

Construction input costs rose faster than bid prices year-over-year (y/y) again in April, according to Bureau of Labor Statistics data posted on May 12. The producer price index (PPI) for material and service inputs to new nonresidential construction increased 0.8% for the month and 20.9% y/y. The PPI for new nonresidential building construction—a measure of the price that contractors say they would bid to build a fixed set of buildings—increased 4.1% for the month and 19.9% y/y. April was the 19th-straight month in which the cost index rose more than the bid-price index on a year-over-year basis, but the one percentage-point gap was the smallest since November 2020. AGC posted tables and a graph of construction PPIs.
Click here for the latest update on the construction economy from Ken Simonson, the chief economist of the AGC.

Catching up with our Customers

This month’s Catching up with our Customers spotlight is of Bernie Walraven, President of Pinnacle Contracting Services. Bernie started his company in 2011, which is a high growth concrete company in the Residential and Multi-Family Home Construction Market. When Bernie started the company 11 years ago, he took a risk to begin the company when his wife was pregnant with their first child, where he worked very hard for the first year as the only employee, and then the business took off from there. Learn more about Bernie’s background, the projects he is most excited by right now, and how they differentiate themselves from the competition by reading the full interview on our blog.

Featured Manufacturers


Owens Corning

Premier supplier of insulation, roofing, and fiberglass composites


Makers of Chemicals and Aggregates for the Concrete Industry



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


Associate Profile


John Bennett

Manager in Training, Greensboro, NC

Our Associate Spotlight this month is of John Bennett, a Manager in Training in our Greensboro, NC branch. John was born in Kernersville, NC and graduated from East Forsyth High School. He went on to graduate from Liberty University with a B. S. in Business Administration. Before joining New South, he worked at a local Commercial Real Estate company during summers throughout college. He is married and enjoys pending time with family and being outdoors, traveling, and going on spontaneous adventures. He joined us last January and has impressed us with being a hard worker and a fast learner.

Our Leadership article this month is one of my columns from the Upstate Business Journal, Lessons from My Mentors. I’ve been fortunate to have had some great mentors who taught me a lot of things the easy way. Click here to see the column.

Lessons from My Mentors


That’s all for this month. As always, don’t ever hesitate to let me know how we can serve you better. I’m always open to suggestions and even complaints.

Best regards,

Jim Sobeck
President & CEO 864-263-4377 (Direct Line)

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Author of The Real Business 101: Lessons From the Trenches. To get your copy see below:

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