May 2021 Newsletter

Dear Friends,

We are living in unusual times for sure. Price increases keep coming, product shortages are delaying some jobs, and to top it off, there is a trucking shortage. This is a perfect storm that is creating challenges during unprecedented boom times in the construction industry. Thus far we have been able to remain in stock on all our key products with only a few rare exceptions. If we have inconvenienced you by being out of something momentarily, I apologize. The good news is that lumber prices are finally falling and manufacturers who didn’t build inventory when COVID first hit have been running around the clock and have at least partially recovered.

A detailed look at pricing trends follows below:

The construction materials market continues to be impacted by increasing prices and supply chain issues. Material shortages and scarce trucking availability have only increased the strains seen within the industry. As a whole, the industry appears healthy and striving with a boom of demand and job starts, but the elephant in the room is how long can it last under the current conditions?

Rebar saw a $40.00 per ton increase pushed through on April 29th by one major manufacturer. Within 24 hours, the two other major manufacturers in our region followed suit. While this increase was not shocking to the market, it did come earlier than what was originally anticipated. The increase seems to have had the mill’s desired effect, with orders surging in to cover summer work and beat any potential of further increases. With the recent surge of inbound orders comes availability issues. What moderate inventory that was available at the mills was quickly scooped up and buying off of future rebar rollings became the norm. New inventory will begin to hit the market as these rollings are complete. Expectations are for rebar inventory to remain tight throughout the summer, especially if the high demand continues. 

Wire mesh reinforcing continues to struggle. The world-wide shortage of wire rod is still having a huge impact on overall mesh inventory. Mills are running and producing as much as possible, but lack of raw materials used to make mesh is slowing overall production. Wire mesh rollings set for early June have already been pushed out weeks and lead times are still projecting at three to four months after time of purchase. 

Polyethylene sheeting maybe the most stable of our four major commodity items. While pricing has not subsided from the spring increases, production and lead times are holding steady. Spot market purchases are running at roughly a month’s lead times, with some lower costs being presented on longer lead time and future purchases.  While this isn’t near where the poly market was this time last year, some form of stability has been good to see. 

The lumber roller coaster continues on. Last month we spoke about how lumber was in a rapid climb… while not in a rapid decline, lumber seems to have peaked and started moving back the other way. More loads are becoming available and production is remaining strong. Activity on the broker’s side has picked up as they try to move high priced loads bought on the upswing before the market crested. Prices remain high, but lumber futures, having trended down for almost a week, give signs that the lumber market may have reached the peak.

The producer price index (PPI) for nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of buildings—increased 1.2% from March and 2.3% year-over-year (y/y) since April 2020, while the PPI for material and service inputs to new nonresidential construction jumped 1.5% and 17.6%, respectively, the Bureau of Labor Statistics (BLS) reported on May 13.

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

Catching up with our Customers

In this month’s segment of Catching up with our Customers, we highlight Exterior Expressions, Inc., a turnkey masonry company that’s skilled in every type of masonry work, including structural and architectural block, brick, stone, and cast stone. In 2013, Jason Overly, and Eric and Robert “Bobby” Allen III became owners of Exterior Expressions, growing the company by expanding into Charlotte, NC and Charleston, SC. Learn about the impressive projects Exterior Expressions has been a part of, their noble company motto, and the company’s core values by reading the full Q&A here.

Featured Manufacturers

CON-DRI

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Access Tile

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Grip Rite

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Associate Profile

Phil Jones
Sales Manager, Atlanta

This month’s associate profile is of Phil Jones, one of our Atlanta-based sales managers. Phil was born in Fort Lauderdale, FL and is a graduate of Charlotte High School in Punta Gorda, FL. Phil had a full academic and athletic scholarship to the University of Florida until he blew out his knees and couldn’t play baseball, so he decided not to attend college. Instead, he chose to pursue a career in the building supply business. Phil joined us this past March after 17 years with three other supply companies. Phil is single but has been in a long-time relationship for the last 6+ years. He has no children, but he does have three dogs. During his downtime he enjoys working with his hands and doing projects around the house and remodeling jobs. He enjoys being outside in nature so when he has time, he likes to ride his Harley to clear his mind and relax. Phil hit the ground running when he started with us in Atlanta and is the only new salesperson I can remember to have a sale ship to a new customer on his first day. Welcome aboard, Phil!

Our leadership article this month is titled Traits of Great Leaders. What sets apart a great leader from a not-so-great leader? Read this article to find out.

Traits of Great Leaders

By Howard Shore

Consider all the leaders you have encountered in government, schools, jobs and organizations. How many of them have you thought of as excellent or even above average?

Recently, I have been pondering why there are so few contemporary leaders I admire and perceive as great. What surprises me is that while they may be hardworking, determined, wealthy, smart and considered successful in many ways, I still do not see them as great leaders.

With so many books written and courses offered on leadership and leadership training, we still lack great leadership everywhere. The books have great content, and the training was valuable, yet something is missing! What’s become evident is that we may be focusing on the wrong attributes. Furthermore, there is no single, recognized standard as to what it means to be a great leader! You can go through the motions and activities of leadership and still fail as a leader.

Some people believe leadership is a title. But we do not need a title to lead, and we can have a title and not be an effective leader. This was well-illustrated by the high school students from Parkland, Fla., after the horrific mass shooting that occurred in 2018. Many students took leadership into their own hands and had a significant impact on our nation. The fact is that one can lead every day of their life.

Some people believe great leadership is about achieving outcomes. However, the focus on results has caused many leaders to go to great lengths to produce them at any cost. Notable examples in recent times are the Wells Fargo fake accounts, Bernie Madoff’s Ponzi scheme and Cambridge Analytica’s use of our records on Facebook. These are extreme cases, but to what extent do outcomes outweigh someone’s impact on others and society? Where does personal conduct come to present itself? Think about Bill Cosby and Harvey Weinstein.

We need to place weight on how leaders affect the trust and confidence of others along the way as we measure their accomplishments. While results are essential, we must place equal or greater importance on how one obtained the results, how that leader has impacted others, and how they have conducted themselves — both publicly and privately.

After evaluating hundreds of leaders, I identified the critical attribute of some great ones: Abraham Lincoln, Nelson Mandela, Margaret Thatcher and Warren Buffett. We are far more fascinated by them as people than by their accomplishments and the impact they have had on society. Our interest has more to do with how they conducted themselves over a lifetime. We call this character! They are not perfect, and each has had missteps and done things people disagree with, but these are people of tremendous character.

Let me share the five character traits I look for in leaders to define them as great. I think you will agree that Lincoln, Mandela, Thatcher and Buffett demonstrate these.

The first trait is integrity. Do the right thing always. Integrity is being able to put your self-interests aside and take the right action. Too many people choose their own interests without hesitation and then act surprised by the suggestion that anyone else would consider another choice. I tell my team members not to do anything they would be embarrassed to read about on the front page of a newspaper or on social media.

The second character trait for great leaders is humility. Be humble and curious; it is essential. People who lack humility think that only an elite few, if any, have contributed to their success. Great leaders realize that their success is a consequence of efforts by many others, if not all, the people in their lives. When you are humble, you continually examine others’ ideas and methods because you know you can always get better. To me, this is quite possibly the most potent character trait.

The third character trait for great leaders is expressing care. Show everyone that they are special. You must care for others; everyone deserves it. Too many leaders believe they are entitled to be cared for, but when it comes to giving care, they dole it out as if there is a class system, and then are surprised by the repercussions. Great leaders have the extraordinary ability to put themselves in the place of another, to empathize with what others are feeling and to understand others’ motives and desires. Weak leaders are oblivious to other points of view — nor do they care about them.

The fourth character trait is consistency. Be reliable and predictable. When you have someone in your life you find unreliable and unpredictable, someone who has been known to demonstrate erratic behavior, how does that make you feel? Dealing with someone whose response is inconsistent causes stress and disharmony. Imagine spending every day consumed with worry about what the leader is going to do. So much time is wasted discussing what these people have done or might do next; it is unproductive. But when someone gives and keeps his or her word, is reliable and predictable, it allows you to feel free to operate at full capacity, be creative and confident, and reach your full potential.

The fifth character trait is influence. Have a positive impact on others. This last trait is important because it demonstrates that a leader is there to serve others, not themself. Poor leaders believe that others are there to help them. They try to figure out how to use people to their advantage.

Influence is the ultimate superpower. Great leaders go big or go home. Their influence is not just on a small team. They impact their communities and perhaps the world.

A person’s character is the only way to measure great leadership. Earlier in the chapter, I mentioned that we all fulfill multiple roles. Every employee may have to act as a leader at a given time. Therefore, we all must demonstrate good character. The beautiful thing is that we can choose whether we want to have integrity, be respectful, have humility, be consistent, be influential — or not. In every interaction, we have a choice.

Lincoln, Mandela, Thatcher, and Buffett spent lifetimes choosing to demonstrate these traits; there is no reason you cannot make the same choices. Managers must set an example for their subordinates!

In closing, I once again urge you to plan your material requirements far in advance of what was the norm in the past. I suggest that you buy out your jobs as soon as they are firm to avoid price increases and shortages. Until things get back to normal, enjoy the nice summer weather and the strong construction economy.

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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