Vol. 6, No. 3 – January 29, 2007

 

 

110th Congress Pursues First 100-Hour Agenda
 

The 110th Congress convened on January 4, 2007, under Democratic leadership in both the House of Representatives and the Senate. The House immediately approved new rules governing congressional ethics, civility and fiscal responsibility. These rules would prohibit House members and staff from accepting gifts of meals from lobbyists, curtail private travel arranged and paid for by lobbyists, and prohibit members from using their influence to coerce a private organization to make employment decisions on the basis of political affiliation.  The reforms also would reinstate budget reforms and require greater transparency in congressional earmarks.

 

The House also approved legislation to implement the 9/11 Commission’s recommendations, increase the federal minimum wage, enhance federal stem cell research and allow Medicare to negotiate lower prices for prescription drugs. This week the House turns its attention to measures denying pensions to Members of Congress convicted of crimes and repealing certain tax incentives for oil and gas companies.    

 

The Senate is still deliberating on ethics and lobbying reform legislation, which it hopes to complete this week.  The Senate also expects to take up legislation to raise the minimum wage, although its version likely will contain a package of provisions to help small businesses contend with the wage hike.

 

Source: NLBMDA, LBM Legislative Update, January 18, 2007

 

 

early-bird deadline - february 1!

 

You still have time to sign up for MLA’s popular estimating workshops at the lowest price – but the February 1^st deadline is fast approaching.

 

MLA is pleased to announce that we have engaged Mike Butts, LBM Solutions, to provide our popular estimating training in 2007. Mike is one of the most recognized trainers in the lumber and building material industry. The training will be offered in Wichita, Kan. on Feb. 20-21 and in St. Louis, Mo. on March 6-7.

 

Day 1 leads participants through a typical blueprint format, scale and content. Students will develop an understanding of architectural symbols such as wood, concrete, insulation and electrical schedules, knee walls, wall sections and cantilevered joists. They’ll also learn about “specification and general notes” – their necessity, importance and how they relate to retail sales. In addition, the seminar teaches participants how to approach reading a blueprint to ensure thoroughness and accuracy when completing an estimate of materials.

 

Day 2 focuses on the skills necessary to calculate the framing lumber requirements of the complete shell of the house through comprehensive study of each construction item. Included in this is a review of contemporary “cut roofs” and their unique estimating requirements. Attendance at Day 1 is mandatory for attending Day 2 or the student must have proficiency at reading blueprints.

 

Mike Butts is the founder and President of LBM Solutions.  His abilities and experience have been called "unsurpassed by other consulting firms in the industry.”  His experience has been gained through extensive work in the field at "street level," implementing the programs and practices he teaches.

 

When/Where:

 

February 20-21 – Wichita at The Best Western Airport Inn & Conference Center

March 6-7 – St. Louis at the Embassy Suites Hotel St. Louis Airport

 

Member Pricing:

• Sign up for Day 1 or Day 2 separately at $225 per day.

• Two-day workshop package - $395 for the first person from a member firm -- $375 each for additional personnel.

• Sign up by February 1 – a $50 per person surcharge will be added for late registrants.

Nonmember pricing is available.

 

Complete information and registration forms are available upon request from MLA at 800-747-6529. Or, simply reply to this email and we’ll send complete information today! You can download a registration form at www.themla.com.

 

 

 

LUMBER NEWS – QUICK GLIMPSES

 

Housing Predictor Forecasts Major Drop… Housing prices will fall an average of 4.2% nationally in 2007, the largest drop in U.S home prices since 1991. But despite that, many local real estate markets in the U.S. will still appreciate, according to Housing Predictor, which forecasts real estate markets in all 50 states.

 

Housing Predictor provides independent real estate market forecasts for more than 250 cities in all 50 U.S. states. Find out whether your housing market is appreciating or depreciating. (Check on your market at http://www.housingpredictor.com.

 

Source: www.housingpredictor.com

 

Fed Official Says Rate Will Not Drop Despite Encouraging News… Despite a recent decline in the nation’s underlying inflation, it is “too early to relax our concerns” about price pressures, a top Federal Reserve official has said, suggesting interest-rate cuts aren’t yet on the table.

 

Fed Vice Chairman Donald Kohn also warned that long-term interest rates could jump if the Fed fails to cut short-term rates as much as the market expects or if there were a reversal in other factors holding down long-term rates. A recent drop in core inflation, which excludes food and energy, is “encouragingly consistent” with the Fed’s forecast for a gradual decline in inflation, Mr. Kohn said in a speech to the Atlanta Rotary Club on January 8.

 

Source: NAWLA Bulletin, quoting the Wall Street Journal, January 15, 2007

 

The Next Wave… Have you built a presence among Hispanic customers in your market? If not, consider that they are the fastest-growing ethnic group in the U.S., and their incomes are growing rapidly as well. Within five years, they'll control more than a trillion dollars in income. Furthermore, when Hispanics remodel, they do it on a large scale, adding bedrooms and updating kitchens and baths.

 

Even though Hispanics are currently clustered in just a few states, they'll spread out, just as every other immigrant group has — and that, too, will happen quickly. This group will be a significant market for remodelers, if not immediately, then very soon.

 

Source: Remodeling Business Update, January 17, 2007

 

U.S. Home Builder Confidence Up from July… Price cuts, lower mortgage rates and incentives fostering demand lead to improved U.S. homebuilder sentiment in January, which was at its strongest since July 2006, the National Association of Home Builders said on Wednesday.

 

In a press release, NAHB Chief Economist David Seiders said, "Builders are starting to see that the worst is behind them and that buying conditions have improved to the point that greater optimism is warranted.”

 

Source: LBM Daily, January 18, 2007

 

Retailing… The National Retail Federation (NRF) forecasts a 4.8 percent increase in retail sales for 2007 (excluding automobiles, gas stations and restaurants). NRF expects the first half of the year to be subdued with sales picking up speed in the second half of the year. In 2006, retail sales increased 6.3 percent. In 2006, spending was higher in the first half of the year, with a housing slowdown, higher energy costs and slow employment growth slowing down sales. In the second half, NRF expects luxury retailers to do well, as well as online merchants. Consumer demand for merchandise related to the home will be influenced by a softer housing market, predicts the NRF.

 

Source: HCI Business Report, Home Center Institute, January 18, 2007

 

New Tax and Health Care Provisions Enacted into Law…Prior to adjournment of the 109th Congress, Congress passed the Tax Relief and Health Care Act of 2006, which was signed into law by President George W. Bush on December 20, 2006 (Public Law 109-432).  The new law extends the tax credit for energy efficient homes through 2008. The Tax Relief and Health Care Act also contains provisions designed to improve Health Savings Accounts (HSAs).  These provisions are: (1) repeal the annual plan deductible limitation on HSA contributions; (2) allow rollovers from health Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs) into HSAs; (3) permit one-time contributions to HSAs from Individual Retirement Arrangements (IRAs); (4) create an exception to the comparable contribution requirements which allow employers to make larger HSA contributions for non-highly compensated employees than for highly compensated employees; and (5) expand HSA contribution limits for part-year coverage.

 

Source: NLBMDA, LBM Legislative Update, January 18, 2007

 

NLBMDA’s Government Affairs Committee Sets 2007 Policy Agenda… NLBMDA’s Government Affairs Committee met on January 12, 2007, to set the policy agenda and government affairs strategy for 2007.  The Innocent Sellers Fairness Act, which is expected to be reintroduced this month by Representatives Dan Boren (D-OK) and Ric Keller (R-FL), will continue to be NLBMDA’s top legislative priority.  Other priority issues will include making health care more affordable for small businesses through Small Business Health Plans (SBHPs) and permanent repeal of the estate tax.  The Committee also discussed establishing an official position on immigration reform.

 

The objective would be to ensure that immigration policies and procedures are reasonable and do not create unfair employment standards, impose financial hardship through costly fines, and cause labor shortages for small businesses.

 

Source: NLBMDA, LBM Legislative Update, January 18, 2007

 

A Rising Tide: Attached Construction… For most people, the notion of a newly built home conjures up the archetype of a detached, 2,500 square-foot home on a pristine lawn in the suburbs. But the reality is that newly-built homes today are often attached to one another, in clusters, condominiums, townhome configurations, and the like. Buyers not only share walls, but they may share yards as well.

 

This shift, which has been gathering steam under the radar for five years or more, has reached the point where more than half the starts in markets such as Washington, D.C., Chicago, and San Diego are attached. Even in western markets such as Las Vegas, 42 percent of new homes sold now touch another home. This data comes from our sister organization, Hanley Wood Market Intelligence, which gathers data on house sales in three dozen major markets nationwide and sells it to subscribers.

 

Source: Builder Business Update, January 23, 2007

 

Business Credit Card Update: Data Shows the Trend Is Real… Some hard data we've uncovered backs up your observations that your customers are using corporate credit cards – particularly from American Express – more often. Maryland's First Annapolis Consulting compiled stats from a number of sources to find that the number of dollars charged to small business credit cards jumped 107% between 2001 and 2005 to hit $219 billion. American Express charges accounted for $98 billion of that 2005 total, up from just $68 billion two years earlier.

 

Source: ProSales Business Update, January 25, 2007

 

Single-Home Market Sales Confirm Stabilizing Trend… December appeared a good month for sales of single homes. Demand in the single-home market displayed signs of stability, with sales rising 4.8%, according to figures released today by the U.S. Commerce Department.

 

"Today's housing report squares with our most recent builder surveys, which show that traffic of prospective buyers is up and consumers are responding favorably to price adjustments and widespread sales incentives," explained NAHB President David Pressly.

 

Source: LBM Daily, January 29, 2007

 

 

HUMAN RESOURCES

 

When the next generation owner joins the business, the senior generation may have some challenges deciding how much special treatment to give the family member, soon-to-be business owner. Should there be special treatment or should the family member be treated as every other employee?

 

An article in the Family Business Advisor says there are up-sides and down-sides to both approaches. If a senior owner decides to give the incoming generation special treatment, then the future owner is not only living in the reality of the situation, but also taking advantage of important opportunities to learn and grow. However, he may feel a sense of entitlement, build unrealistic expectations and be distanced from non-family employees.

 

For those who get no special treatment, the benefit is that they quickly learn the realities of the work world, gain empathy for employees and gain respect and credibility. However, no special treatment may mean they miss opportunities to develop skills and ownership preparation and may be de-motivated.

 

A good solution is the 80/20 rule where the future owner spends 80 percent of his time on the job and 20 percent outside those responsibilities. The 20 percent activities might include participating in strategic planning, attending board meetings, visiting important customers and taking ownership-related classes. This approach recognizes the reality of the situation, which is that the incoming generation will someday be owner. But, it also deters some of the downfalls of special treatment.

 

When considering a special assignment for a next generation owner, be sure to plan activities that give exposure to a wide range of business areas, choose an appropriate supervisor who can deliver honest feedback, and have a system in place that establishes clear goals and provides relevant evaluation.

 

Source: HCI Business Report, Home Center Institute, January 18, 2007

 

Mold – A Growing Problem

 

You may have heard about the explosion of mold claims and lawsuits. Mold is more prevalent in warm, moist climates; however, mold claims are being reported in all areas of the country. It can grow any time the environment includes moisture, a food source, and the proper temperature.

 

Generally, dampness is the prevailing cause of mold growth in commercial and residential properties. Most building materials provide a food source once moisture is present. The United States Environmental Protection Agency and Center for Disease Control offer many tips for controlling this exposure including the following common sense steps.

 

ü      Fix water leaks and seepage promptly.

ü      Use exhaust fans in bathrooms and kitchens.

ü