September 2020 Newsletter

September 2020 Newsletter


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New South News

Dear Friends,

As this unusual year continues to unfold, the construction industry continues to remain strong. Single- family home construction and resales are booming, and many commercial project starts that were on hold are now moving forward. Fingers crossed for a vaccine breakthrough and for Covid-19 to end so we can all get back to “normal.”

I am pleased with the positive construction news; however, this also results in a downside: price increases. See below for more info on that.

The rumors of a price increase on rebar came to fruition the second week of September. Scrap prices continue to rise and posted up $45/ton to start September causing an adjustment from the mills. With the hike in scrap prices, CMC Steel led the way and pushed through a $40 per ton increase on rebar the second week of September. By the end of the next week both Nucor Corporation and Gerdau followed suit. With scrap in shorter supply and global demand increasing, we expect this price increase to hold and this may only be the first round of increases. Multiple signs are pointing to another increase coming in mid-October. Scrap pricing is expected to continue to climb and is currently outpacing rebar pricing by $10 – $20 per ton. That variance in cost is being monitored by the mills, and the market could see another increase to bring those costs closer together.

There has been no change in current wire mesh pricing after last month’s 7-9% increase went into effect. Pricing has remained stable over the past few weeks, but like rebar, scrap prices are having an impact on production costs. No official announcements on price increases have been released yet, but we expect two or three manufacturing mills in the Southeast to announce another price increase in the coming weeks. Now would be a good time to place any stocking or project-based orders to beat the pending
increase.

Polyethylene continues the trend of increases in commodity goods. The recent hurricanes in the gulf have had a major impact on production lead time and the distribution of raw materials. Much of the country’s poly sheeting is manufactured in Texas and the back to back hurricanes put almost a two week hold on production. Lead time for truckloads of poly are now exceeding three or four weeks. We have already received one price increase with an approximate increase of 6% pending. This increase is being pushed through mainly due to the multiple increases in resin costs the manufacturers have absorbed over the past few months. Price increases will go into effect on any orders placed after October 12th, with all orders placed for immediate shipment before October 9 th being billed at current costs.

Lumber pricing remains high moving into the fall season. On a positive note, more loads seem to be available and covering needs has not been as difficult as the prior few months. Pricing, while still high, has seemed to stabilize for the time being and the historical climb since April has plateaued a bit. We expect pricing to remain high for the short term, but are hopeful relief is in sight. Lumber pricing typically softens in the winter months with reduced demand and the hope is that trend continues this winter.

Here are a few other manufacturers of note that have announced upcoming price increases:

Wire Bond, a leading manufacturer of masonry reinforcing and accessories, has announced a price increase on wire items that will go into effect in mid-October. The estimated increase is expected to be 10-12%. The major reason for the increase is scrap metal being in short supply and high demand.

Specified Technologies has released a price increase notice on their firestopping products for 2021. An increase to not exceed 3.5% on most products will go into effect on January 1, 2021. This increase is based on increases in raw materials, transportation, and general operating costs.

We will continue to update you with any additional price increases or market changes.

Construction costs diverged again in August, as indicated by producer price indexes (PPIs) that the Bureau of Labor Statistics (BLS) posted on September 10. AGC posted tables showing PPIs relevant to construction. The PPI for new nonresidential building construction or “bid price” index—a measure of the price that contractors say they would charge to build a fixed set of buildings—slipped 0.3% for the month, not seasonally adjusted, and is up just 0.1% since April. Meanwhile, the PPI for inputs to new nonresidential construction rose 0.7% in August, for a four-month gain of 4.1%. The PPI for new residential construction climbed 1.8% in August and 4.9% over four months. Compared to August 2019, the PPI for new nonresidential building construction increased 2.0% year-over-year (y/y), while the PPI for inputs to new construction inched up 0.1% for nonresidential and rose 2.5% for residential. Items important to construction with large 1- or 12-month changes include: lumber and plywood, up 11% for the month and 27% y/y; copper and brass mill shapes, 3.2% and 7.9%, respectively; diesel fuel, 5.9% and -7.3%; aluminum mill shapes, 1.7% and -9.8%; and steel mill products, -1.7% and -11%.

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

Catching up with our Customers

Featured in this month’s Catching Up With Customers Q&A installment, meet Mike Turner and John Bueltel of Cornerstone Masonry Group LLC. After interviewing John (President) and Mike (VP), it is clear they are most proud of their dedicated and hard-working employees who are integrated into every part of their business. Whether they are working on Cornerstone Masonry projects throughout the southeast, the Cornerstone Masonry church mission in Honduras, or as mechanics for Cornerstone’s American Flat Track Series Motorcycle Racing Team, they know they can count on them to get the job done, similarly to how they count on New South every day to supply their masonry construction needs. Read the full Q&A by visiting our website. There, you will learn more about the two competitors who became partners, combined their vast knowledge of industry and craft, and turned it into the reputable business they have today.


Featured Manufacturers

SpecChem

Makers of Chemicals and Aggregates for the Concrete Industry


 

Spyder

Manufacturer of blades and attachments that work as long and hard as you do

 

Makita

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


NSCS Associate Updates


This month we gave $5,000 bonuses to five of our CDL drivers, Ron Conover (Greenville), Scott Haas (Columbia), Tom Twiddy (Greensboro), Eric Singleton (Charleston), and Grady Sutton (Raleigh). We give our CDL drivers $5,000 bonuses for every five years of service to say thank you after years of loyalty, safe driving and working hard for our customers. Our drivers are the face of our company to most customers as we deliver most of what we sell. These gentlemen represent us extremely well and were very deserving of these bonuses. Click here to see all of the photos of our drivers receiving their recent bonus checks.


Associate Profile
 


Dylan Logan
Manager in Training, Greenville, SC

Our Associate Spotlight this month is of Dylan Logan, a Manager in Training in our Greenville branch. Dylan was born in Hackettstown, NJ and graduated from Mauldin High School, near Greenville. He then earned his B.S. in Criminal Justice from Clemson University in 2019. Prior to joining us back in June he was the manager of a car wash in Simpsonville, SC and was also a Facilities Specialist at Brookwood Church. Dylan enjoys spending time with his girlfriend, watching Clemson football, working out, and spending time with friends. Dylan is one of the fastest learners we’ve ever hired, and he’s made an immediate positive impact on the Greenville branch.

Our management article this month is, Ideas for Supporting Remote Workers and Workplace Culture. With many companies still not back in the office there are challenges with perpetuating your company’s culture among remote workers. There are several good ideas in this article to help with that issue.


Ideas for supporting remote workers, workplace culture

By Will Bunch

In the early months after Submittable, a Missoula, Mont.-based software company that employs about 100 people, shut down its office because of the coronavirus and told employees to work from home, people manager Asta So spent a lot of time figuring out how and when to bring workers back. But as the pandemic dragged on, her focus has increasingly been on boosting the morale and gauging the work/life balance of homebound employees.

“One of the things I’m trying to figure out is how to keep our culture,” So says. One of her recent projects was “trying to get 15 random employees to get shaved ice in this park near our office—to go outside and, socially distanced, see people that they don’t normally get to see, to cultivate more spontaneous or impulsive interactions.”

In the beginning of the COVID-19 shutdown, So and her teams also organized virtual lunch get- togethers, though lately there’s been some “Zoom fatigue.” Now, some teams are establishing lunch hours where people make sure to go offline or trying to arrange one-on-one meetings in safe outdoor locations—although, “with winter coming, it’s going to be more tricky.”

None of this was in the training manual for So—or for any other HR executive—when they signed up for people management. As the extended pandemic not only triggered lengthy shutdowns but also inspired many firms to announce full-time work from home options for many or all employees, people managers needed creative solutions to brand-new problems. Do workers have the right technology, ergonomic chairs or other logistical support? How do you foster a collaborative culture when workers aren’t in the same place? And what about workers who struggle emotionally with being home alone?

“The biggest problem is isolation: How do you force these collaborative pathways?” says Nancy Rothbard, professor of management at the University of Pennsylvania’s Wharton School. She says one of the biggest new tasks for HR is to work closely with middle managers to make sure they have the right tools and apps, and a smart strategy, to make teamwork happen remotely. “The virtual watercooler is needed,” Rothbard says, “but it may feel weird to managers, and so you will need to create models.”

Rothbard also notes that companies saving money from downsizing offices or expenses such as maintenance need to think about ways to reinvest some of these dollars on the new needs of employees working from home. Some firms are already doing that, including ServiceNow, the Santa Clara, Calif.-based software company, which early in the pandemic gave each homebound employee $500 to spend on wellness needs, then expanded the payout to $700 to address other issues such as technology for workers’ kids learning from home.

Karen Drosky, a vice president for human resources at ServiceNow, says monthly wellness surveys have been critical. “Those wellness surveys informed us what we needed to do to make employees happier,” she says. “They told us what they needed.” ServiceNow also employs gimmicks such as a contest for the best “staycation,” because the tech firm—like many of its rivals—worried that locked-down employees weren’t using their time off.

Submittable’s So says she also directs considerable attention to keeping the workforce both energized and connected without an office, taking formerly in-house features like exercise classes or lunchtime-discussion groups onto platforms such as Zoom. “We’re trying to translate all the things we used to do in-person to online,” she says.

Alex Alonso, the chief knowledge officer at the Society of Human Resource Management, says it’s important for HR leaders to be patient, realize the pandemic may not end quickly and be flexible. “I would ask most HR officers, people managers and other business leaders to think about what happens in the pandemic that you’re going to make permanent,” he says, “and, rather than just thinking in terms of cost and operations, think about what kind of cognitive work to take from this so when the next situation arises, you’re ready to deal with any number of challenges that arise.”


In closing, with every day that passes we get closer to getting back to normal. Until then we just need to keep on keeping on. Thank you for your continued 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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