Dear Friends,

Happy 2023!  As you know, Jim and his family have decided to sell New South to Colony Hardware out of Orange, CT, and I’m pleased to share the process is moving forward well.  After spending time with the Colony Team, we are fully confident the associates of New South will continue in their current roles, all your contacts will remain the same, and the New South brand will continue to flourish. 
 
The transaction is expected to be complete in February.  With that, Jim will phase out of the day-to-day operations and work closely with Colony on M&A opportunities.  Note: he is not retiring … simply taking a step back and doing what he does best – crafting and closing deals!  All of us at New South thank Jim, and his family, for their 21 years of ownership and leadership in the industry.  His unique and candid insight will be missed on a daily basis … however he’s only a phone call away – for New South associates, suppliers, and most importantly – customers.
 
With that in mind, it’s an honor, and a privilege, to be able to author this newsletter, which Jim has done for the last 20 years.  Our goal is simple – we aim to ensure you receive the same level of information, insight, and reliability you have come to expect since 2003, and our entire team is committed to do so.
 
Now … let’s get down to business, starting with a market analysis from Peter Bemisderfer, our Director of Purchasing:
 
As the year begins, most commodity items have seen little change since December.  In January, scrap metal finalized at $415 per ton. This is slightly up from December’s number of $385. The slight increase in scrap is not expected to have a large influence on domestic rebar pricing, but may help to solidify the bottom. The recent slide of rebar pricing over the past few months seems to have stopped with pricing holding firm over the past few weeks. Import remains a factor on domestic pricing, but the inbound supply of import rebar is expected to slow over the next month or two. The last major influence on rebar is demand. Demand remains moderate, with most needs and quantities easily acquired from domestic mills. Lead times have remained consistent at only a week or two depending on diameter and length.  
 
Wire mesh has also remained flat over the past few weeks. This is a welcome sign from the rapid decline in pricing seen over the prior three to four months. While demand remains on the softer side, the scrap increase appears to have helped the falling market. It will be worth monitoring overall demand in the upcoming months; if the demand remains soft or becomes softer, we may see another slide in mesh pricing. Lead times are currently short. Most standard sizes and gauges are able to ship out within a week to a week and a half.
 
Polyethylene sheeting has also remained flat since December and there was no impactful movement from the price softening seen in the fourth quarter of 2022. Mills remain moderately busy but have had the ability to stockpile small amounts of sitting inventory. Most standard mil thicknesses and dimensions are shipping out 1-2 weeks after purchase order receipt. Mills have been fairly flexible on pricing dependent on volume and need date. Large volume orders with reasonable need dates have had the greatest chance for negotiation opportunities.
 
The lumber market appears to have hit bottom and begun bouncing back up. This is being seen in both the SPF and SYP markets. Higher level futures on SPF are causing some buyers to jump in and buy supply now. While this is elevating the level of overall purchases, there does remain a fair amount of SPF available for prompt shipping. This availability is capping the possibility of an impactful increase in the very near future. SYP is following a similar pattern. Mills are asking for elevated levels but are not getting as much business out of these numbers as anticipated. There continues to be ample prompt supply in the SYP market which is suppressing the chance for a quick spike in pricing.

Like most winters, a softer immediate demand for materials is keeping most commodity-based items flat. This can certainly change and there is anticipation for movement on most commodity items approaching the busier spring season.
 
Construction is a major contributor to the U.S. economy. The industry has more than 745,000 employers with over 7.6 million employees and creates nearly $1.4 trillion worth of structures each year. Construction is one of the largest customers for manufacturing, mining and a variety of services.
 
Click here for the latest update on the construction economy from Ken Simonson, the chief economist of the AGC.

CATCHING UP WITH OUR CUSTOMERS

ASSOCIATE PROFILE

January’s Management Article is The 8 Rules of Leadership by Jack Welch. As one of the greatest CEO’s in history, Jack’s insight is candid, enlightening, and highly informative. I hope you enjoy it.
 

The 8 Rules of Leadership by Jack Welch

Leadership is best taught by example. Follow these eight indisputable rules directly from the playbook of the former head of GE.
BY DANA SEVERSON, CO-FOUNDER, STARTUPSANONYMOUS.COM
 
Leadership is all about growing others. It’s about your team and its welfare. It’s about your direct reports and their performance.
 
Leadership is a tough act. It’s a daily balancing act. As a leader, you’re expected to use your insight, experience, and rigor to balance the conflicting demands of short- and long-term results.
 
So, what do leaders do? Does leadership have rules? Former General Electric boss Jack Welch says so in his classic 2009 book Winning, which he wrote with Suzy Welch.
 
His rules of leadership are as follows:
1. Leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach, and build self-confidence.
The team with the best players wins–and leaders should expend their energy and time in evaluating, coaching, and building the self-confidence of team members.
 
“People development,” Welch writes, “should be a daily event, integrated into every aspect of your regular goings-on.”
 
As a leader, it’s important to recognize and acknowledge the good work of your team in order to continue to encourage peak performance, why instilling confidence.
 
2. Leaders make sure people not only see the vision, but they also live and breathe it.
Good leaders cast the vision of the future and motivate people to buy into it. They constantly talk about their vision and reinforce it with rewards, which may be in the form of a salary, bonus, or significant recognition of some sort.
 
Even without the rewards, just sharing your vision as a leader can in itself bring about the motivation your team needs to accomplish the most difficult of assignments.
 
3. Leaders get into everyone’s skin, exuding positive energy and optimism.
Effective leaders fight the negative forces of life and encourage their teams with a high level of optimism that keeps members upbeat.
 
Welch says they do not allow a bad economy or brutal competition to put them down to the extent that their team catches the bug.
 
Why? “Unhappy tribes have a tough time winning,” Welch writes.
 
Nothing brings down the morale of a team more than an unenthusiastic or disengaged leader. Your job is to be part coach and part cheerleader.
 
4. Leaders establish trust with candor, transparency, and credit.
Welch decries a situation where leaders hoard information that could benefit direct reports in the performance of their duties. This, he says, drains trust right out of a team. And that, “trust happens when leaders are transparent, candid, and keep their word.”
 
Leaders, he also says, establish trust by giving credit where it is due. They detest a situation where they’ll take credit for someone else’s idea or work.
 
If you want your team to be transparent with you, you need to lead by example.
 
5. Leaders have the courage to make unpopular decisions and gut calls.
Effective leaders listen to their gut, Welch says, regardless of what team members think.
 
“Obviously,” he writes, “tough calls spawn complaints and resistance. Your job is to listen and explain yourself clearly but move forward. Do not dwell or cajole.”
 
Decision making is ultimately what you’ll be judged on as a leader, as your choices could determine the overall success of the organization. With transparency, trust and a clear vision, you’ll find that your team will stand behind your decisions (right or wrong).
 
6. Leaders probe and push with a curiosity that borders on skepticism, making sure their questions are answered with action.
To get bigger and better solutions, Welch says leaders probe proposals and presentations by asking questions and stirring up a healthy debate.
 
He writes:
 
“When you’re a leader, your job is to have all the questions. You have to be incredibly comfortable looking like the dumbest person in the room. Every conversation you have about a decision, a proposal, or a piece of market information has to be filled with you saying, ‘What if?’ and ‘Why not?’ and ‘How come?'”
 
Challenging your employees is an art, not a science. Each individual requires a unique approach. It’s your job as a leader to get their best without diminishing their productivity.
 
7. Leaders inspire risk taking and learning by setting the example.
“Winning companies,” Welch writes, “embrace risk-taking and learning.” Leaders set the example and encourage team members to experiment without being afraid of making mistakes.
 
Experimentation is a major key to growth. Make sure your team feels confident in making mistakes.
 
8. Leaders celebrate
While noting that leaders don’t celebrate enough, the former GE boss advocates that leaders make a big deal out of small wins because “celebrating makes people feel like winners and creates an atmosphere of recognition and positive energy.”
 
Don’t be afraid in celebrating early and often. Far too many leaders believe celebrating small victories leads to complacency. Nothing could be further from the truth.
 

In closing, all of us here at New South would like to reiterate our appreciation and gratitude to Jim, and the entire Sobeck family, their years of dedication and service to our industry.  It’s not easy building a successful business … and they did so with the help of our customers, associates, and suppliers.
 
I also want to thank all of our customers and suppliers for the trust and confidence they put in New South.  We greatly value our relationships … and one of the many things that Jim has instilled in all of us is that our biggest strength is our relationships with the people we are privileged to do business with … and we will never lose sight of that. 
 
If we aren’t living up to your expectations … for any reason …  please never hesitate to contact me directly.
 
Thanks for everything … and here’s to a great 2023 for our industry,

Abhi Singh
EVP & Chief Operating Officer
abhi.singh@newsouthsupply.com
864-263-4387 (direct line)

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