December 2016 Newsletter

• As many analysts expected, the price for scrap steel posted up by $42/ton on the Chicago Metals Exchange on December 8^th. Also, as expected, in mid-December, wire rod manufacturers announced a price increase of $45/ton effective January 1^st which will be the second consecutive month wire rod manufacturers have increased prices. Metal alloy prices continued to increase in December after spiking in November. Prices for asphalt, resins, and chemicals have increased substantially over the past two months. With raw material costs rising several manufacturers of construction products we distribute either increased prices in December or will increase prices in January.

• Masonry reinforcing and tie manufacturers will increase prices in January between  10 and 15%, but have yet to announce the effective date of their price increase. They have indicated that the price increase will become effective in mid-January and will offer price protection for jobs previously quoted for 30 days after the effective date of their price increase. We strongly recommend that if you have any projects which require masonry reinforcing and ties that you buy out these projects by early January.

• Some domestic concrete reinforcing wire mesh manufacturers increased prices the second week in December between 5 and 7% and others have announced they will increase prices by January 1^st. If the January 1st wire rod price increase holds, concrete reinforcing manufacturers have indicated that they will increase prices again in February. If you have any projects requiring wire mesh we recommend you buy out these jobs as soon as possible to avoid paying higher prices in January and February.

• Nomaco, one of the leading manufacturers of polyethylene foam construction products announced they will increase prices by 3% on backer rod and expansion joints February 1^st. Other manufacturers are expected to increase prices by the same amount on February 1^st.

• GCP Applied Technologies (formerly Grace Performance Chemicals) announced on December 2^nd a price increase of 5% on all commercial waterproofing and air barrier products effective January 1^st. Carlisle Coatings and Waterproofing will also increase prices on January 1^st on waterproofing and air barrier products.

• Domestic rebar mills increased prices on December 2^nd by $25/ton effective immediately and analysts expect them to increase prices again by early January due to scrap steel posting up by $42/ton on December 8^th. Since late October, domestic mills have increased prices by $75/ton or about 15%. Consider buying out any requirements you have for domestic rebar prior to January to avoid paying higher prices if mills increase prices again as anticipated.

• Prices for imported rebar continued to move up in December and are now $40/ton higher than in October and around $15/ton higher than in November. Offerings for January are now between $15 to $20/ton higher than current pricing. A final ruling is to be made on the trade case filed by domestic rebar manufacturers against Turkey, Japan, and Korea for dumping in mid-January. Most analysts expect a tariff to be imposed and speculate that it could be as much as 30%. If a tariff is imposed, imported rebar prices will likely spike by a like percentage as soon as the ruling is made.

• Mar- Mac Industries announced they will increase prices on their Premium line (made inthe USA) of tie wire, merchant coils, and bar ties effective January 16^th.  The price for black-annealed products will increase by 3% and the price for plastic coated products will increase by 2%.

• Several polyethylene sheeting manufacturers reduced prices by approximately 4% in early December, as they typically do at this time of the year, to try and book sales before the end of the year. With raw material costs and manufacturing costs rising, manufacturers have indicated they will increase prices in early January and some have said the price increase may be as much as 10%. Costs for polyethylene sheeting products are now as low as they will be for the next several months, so consider buying out any requirements you have for projects that will start in the first quarter of 2017 as soon as possible.

• BASF Construction Systems announced on December 16^th a price increase effective February 1^st. Prices for most items will increase between 3 and 5%. If you are bidding projects which specify BASF products that will start after January, 2017, ask us for your new costs.

• The producer price index (PPI) for final demand in November, not seasonally adjusted, increased 0.1% from October and 1.3% year-over-year (y/y) from November 2015, the BLS reported on December 14. AGC posted tables and an explanation focusing on construction prices and costs.

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

Doug Saunders

Our associate profile this month is of Doug Saunders, one of our sales managers in Greenville, SC. Doug was with us in our early days (1989-92) and he then worked for two other companies before rejoining us last August. Doug was born in Charleston, WV and graduated from Hillcrest High School in Simpsonville, SC. He received his BA in Business from Innova University. Doug is married and has one son, Han, a senior engineering major at the University of North Carolina-Charlotte. Doug’s hobbies are travel (he has been on 17 cruises has been to China five times) history, architecture, and the outdoors. It’s great to have Doug back on the team.

Our management article this month is titled, Being Good at Work Doesn’t Make You a Great Leader. A lot of people who are proficient at their job get promoted into management and then struggle. This article has some good ideas on how to successfully transition into being an effective manager.

DECEMBER’S MANAGEMENT ARTICLE

Being Good at Work Doesn’t Make You a Great Leader
By Steve Keating

Generally speaking, people get promoted because they did something good. Salespeople get promoted to Sales Manager because they were good at selling. A marketing associate gets promoted to Marketing Manager because they had proven themselves to be good marketers. An engineer might get promoted to manager because they designed stuff that worked well and was marketable.

All three of those individuals were promoted to leadership positions and none of them were promoted because they were skilled leaders. Now, they may be good leaders…or they may not, only time will tell.

Here’s a reality of leadership: the vast majority of people are promoted into leadership positions without having demonstrated even a slight ability to actually lead. Many are promoted into leadership positions because they have demonstrated some ability to manage but leading and managing are two entirely different things.

You manage stuff like budgets, inventories and buildings but you lead people. The skill sets are different and more importantly the mindsets are different, in fact, they are completely different. Some people can master both skill sets but that’s less common than many people think.

The biggest mistake a person newly promoted to a leadership position can make is to believe that just because they were good at selling, or marketing or even because they were good at managing, is that they are automatically good at leading.

The saddest thing is that even people who have occupied leadership positions for years still sometimes believe that.

Your position or title doesn’t make you a leader. Even being a good manager doesn’t make you a leader. Running a business, effectively managing every detail, and making money at it, doesn’t make you a leader.

Only leading makes you a leader.

Leading requires that you fully understand the value of people. Leading requires that you understand the unique ability of every individual you would lead. Leading requires that you actually care for those individuals.

This is kind of an aside but here’s one way to determine if you’re talking to a manager or a leader: When you’re talking to a manager you get the feeling that they are important; when you’re talking to a leader you get the feeling that you are important. That “feeling” makes all the difference in the world.

Leading requires that you have the vision required to see the consequences of the consequences of the consequences of every decision you make. It can sometimes seem as if a good leader can see into the future but the truth is, they don’t see the future, they create it.

Let’s be clear, I am not minimizing the importance of good management in any organization. Good management is essential to the stability of every kind of business but management does just that, it keeps things as they are, stable.

Leadership is not about stability, it is about growth. Leadership is about change for the better. While managers can fall into the trap of believing that strong management can improve a business, leaders know that nothing improves without something changing and they drive that change.

Many more businesses fail due to lack of leadership than fail due to poor management. Think about it, do you really think that businesses like Montgomery Wards, Blockbuster Video, Circuit City, Howard Johnson’s and Borders Books, (to name just a few) suddenly lost the ability to manage their business?

They didn’t lack sound management, they lacked the vision that a true leader brings to an organization. They lacked the ability to rally their people to a cause. Their people couldn’t commit to the leadership because they couldn’t find any leadership.

I could write forever on the differences between managing and leading but for now I’ll just say this: the first step to understanding the difference between managing and leading is to understand that THERE IS A DIFFERENCE. The difference is not just semantics, the differences are real, concrete and definable.

Once you understand that basic fact then and only then to you have a chance to truly lead.