Vol. 6, No. 22 – October 22, 2007

 

 

SAVE THE DATE – NOVEMBER 1-2

 

It’s no secret that home construction is down in most markets. But, that doesn’t mean your sales have to fall. Increase sales and profits by taking customers away from your competition, learning new sales and closing techniques and finding new approaches.

 

Plan to attend this year’s Fall Fling – the Annual Meeting of MLA members – on Thursday and Friday, November 1-2, 2007, at the Marriott Country Club Plaza, Kansas City, Mo. We’ve brought back the popular “dine-around” on Thursday evening and you won’t want to miss the presentation on Friday morning by industry veteran, Bob Janet.

 

You should have already received information and a registration form with your MLA newsletter in early September. (This information is also posted on the MLA web site at http://www.themla.com/Fall-Fling.htm, along with complete sponsorship information.)

 

We realize you sometimes measure the value of a meeting in its price. But, don’t assume because we don’t charge you a registration fee, it’s not worth your time.  While we provide this meeting to members at no charge, the Association and our generous sponsors are covering the costs associated with the meeting. Bob Janet’s fun-entertaining programs are loaded with sales and marketing skills and techniques that help members increase sales and profits even in a slowing market. Plan to attend and register today!

 

 

LETTER FROM NLBMDA PRESIDENT

 

October 9, 2007

 

Dear NLBMDA Members,

 

As your new Chair, I am pleased to announce that the Board of Directors unanimously voted Thursday to name SmithBucklin Corporation as NLBMDA’s full-service association management company.  Russ Snyder, senior vice president of client management for SmithBucklin’s Washington, D.C.-based client organizations, was voted as the Interim President.

 

We are confident that the management model and experience provided by SmithBucklin’s resources and staff will allow NLBMDA to continue as the leading voice of the lumber and building materials industry.  SmithBucklin is the world’s largest association management and professional services company, serving over 235 client organizations, including associations, professional societies, and government institutes and agencies.  We are excited to be able to tap into their staff of 750 professional employees that provide tailor-made management, administrative, membership, communications, education and certification, convention and meetings management, and government relations services.

 

NLBMDA is already working with Snyder to transition our operations to SmithBucklin.  We expect that process to take 30 to 60 days, and we will do our best to ensure that the transition is as seamless and efficient as possible.  Snyder has worked for the past six weeks with former Chair Steve Kelly, the NLBMDA staff, and I to help prepare a judicious budget that will serve to improve NLBMDA’s finances while allowing us to continue to provide valuable services to our diverse membership across the country.

 

Among our foremost priorities is to work with SmithBucklin to help manage our Legislative Conference from March 31 through April 2, 2008 in Washington, D.C. and the 2008 Industry Summit next October in Tucson, Ariz.

 

Thanks to everyone who attended this year’s Industry Summit and helped make it another memorable event, and we look forward to seeing everyone at Legislative Conference in the spring.

 

Sincerely,

Harold Baalmann

Chair, NLBMDA

President, B&B Lumber, Wichita, Kan.

 

 

LUMBER NEWS – QUICK GLIMPSES

 

When Will it End?... The housing downturn will run its course, and sales and pricing power will pick back up eventually. Just do not expect a recovery in 2007 or 2008. It's not happening.

 

Though the odds that the economy will fall into recession increased this summer, the most hopeful of the new-home prognosticators still predict that new-home sales will rebound in the middle to later parts of 2008. Others take a darker view, envisioning the market bottoming out in 2008, with at least a year of dragging along the bottom before gradual recovery begins in 2009. And the most pessimistic see no way that the bottom will happen before 2009, with recovery stretching beyond the opening decade of the new millennium. Yes, you read that correctly: no improvement on a sustained basis until 2010 at the earliest.

 

Source: Ethan Butterfield, Builder On-Line Business Update, October 9, 2007

 

ProSales' A/R Survey Finds Customers Are Paying You 2.6 Days Later… ProSales Business Update readers say that, on average, they're getting paid in 46.6 days, up from an average accounts receivable last year of 44 days. But those numbers hide significant differences among subgroups. The survey results show, for instance, that average A/R days vary from 37.1 days in Pacific Coast states to 53.1 in the Mid-Atlantic region. Southeastern states have seen the biggest increase in A/R days outstanding from last year—up nearly five days. Over one-third of you say you've increased the amount of time and/or people devoted to collections. And here's one irony: It doesn't seem to matter whether you demand total payment in 30, 45, or 90 days—the average A/R days outstanding is about 46 regardless. Get Summary of Survey Results

 

Source: ProSales Business Update, October 10, 2007

 

More on No-Match Rule… A federal judge slapped a preliminary injunction on the Department of Homeland Security (DHS) and the Social Security Administration (SSA) stopping them from further action on the controversial no-match rule. Judge Charles Breyer said that plaintiffs had prevailed on four points – that the rule contravenes the governing statute, that DHS exceeded its authority, that the rule is arbitrary and capricious under the Administrative Procedure Act and that it violates the Regulatory Flexibility Act.

 

The order is in response to a lawsuit by a group of labor, business and civil rights organizations. It challenged a rule issued by DHS telling employers it would use no-match letters sent by SSA as evidence they knew they were hiring undocumented workers unless the employer responded to the letter. DHS wanted SSA to include a warning notice with its traditional no-match letter. Breyer said his ruling does not prevent SSA from sending the no-match letters for tax purposes.

 

Source: Last Week in Washington, published by North American Retail Hardware Association, October 15, 2007

 

Federal Regulations Affect Small Businesses Most… According to a study conducted by the Small Business Administration (SBA) Office of Advocacy, businesses with fewer than 20 employees annually spend 45 percent more per employee than larger firms to comply with federal regulations. The study found that, on average, small businesses spend $7,647 per year per employee to comply with federal regulations, as opposed to $5,282 per year per employee for businesses employing more than 500 workers.

 

Source: The Advocate, published by NLBMDA, October 15, 2007

 

Court Grants 90-Day Stay in Hours of Service Ruling… In July, the U.S. Court of Appeals for the District of Columbia Circuit vacated two provisions of the Department of Transportation’s (DOT) 2005 rule which: (1) raised the number of hours of allowable daily driving time from 10 hours to 11; and (2) allowed drivers to restart the weekly clock after 34 hours of rest. Subsequent to this ruling, NLBMDA joined the American Trucking Association requesting an eight-month stay of the court’s decision to give the Federal Motor Carrier Safety Administration (FMCSA) time to issue an interim final rule instating the 11-hour driving time and 34-hour restart provisions until a final rule can be written by DOT. On Sept. 28, the Court granted a 90-daystay. This will give FMCSA an opportunity to conduct rulemaking keeping the contested provisions intact.

 

Source: The Advocate, published by NLBMDA, October 15, 2007

 

Menards Pitches New Store in Evansville, Ind. … Menards is seeking to build a 230,000-square-foot retail site in Evansville, Ind., according to a report in the Evansville Courier & Press.

 

The store, slated for a 26-acre site, would include a 162,000-square-foot store and additional 4.5-acre lumberyard and building materials area. The project is expected to cost $10 million, according to the report.

 

Tom O'Neil, real estate acquisitions manager for Menards, told the newspaper, "We try to build only one size store for a more consistent merchandise layout to best familiarize our customers with our different locations, which are all the same. Evansville -- by its sheer size alone -- can't be ignored by retailers.”

 

Menards operates big-box warehouse stores in 11 states.

 

Source: HomesChannelsNews ProDealer Digest, October 16, 2007

 

Schwarzenegger Axes Three Green Building Bills... California Gov. Arnold Schwarzenegger (R) vetoed three state assembly bills that, according to the Lumber Association of California and Nevada (LACN), would have imposed expensive green standards and micro-managed building policy.

 

Assembly Bill 35, introduced by assembly member Ira Ruskin (D-Redwood City), would have required state buildings to meet, at a minimum, a LEED gold rating. “This bill would create bias for certain building materials over others without clear benefit,” Schwarzenegger said in a statement, noting that the bill would ignore the state’s Building Standards Commission.

 

Source: ProSales Online, October 17, 2007

 

Housing Starts Decline 10.2 Percent In September… Nationwide housing starts declined 10.2 percent in September as builders focused on reducing their inventories in the midst of continuing mortgage market travails, according to data released by the U.S. Commerce Department today. The majority of the downward movement was centered in the multifamily sector, where a significant uptick in starts had been registered in the previous month.

 

Source: NAHB, October 17, 2007

 

U.S. Lumber Hits Four-Year Low… Lumber prices at the Chicago Mercantile Exchange (CME) are at their lowest point in four years, and it seems likely that, until production is cut, prices will continue to fall, possibly as low as $200 to $210 per thousand board feet.

 

“It isn't a question of price any more; there isn't any demand,” said Sandi Castillo, who staffs the CME lumber desk for Rosenthal Collins. “The housing starts and the permits came out a lot more negative than what we were looking for.”

 

Source: LBM Daily, October 18, 2007

 

OSB Mill Closures Reported…  Louisiana-Pacific announced Thursday that the company will cease operations at its St-Michel-des-Saints, Quebec mill. The mill's production, curtailed since August 2006, was oriented strand board (OSB). “Permanent closure of the mill was a very difficult economic decision because of the impact on our employees and the community. We regret having to take this step at St-Michel. Unfortunately, a number of factors have combined to put the mill in a poor competitive position for the foreseeable future, making this decision unavoidable," explained Jeff Wagner, executive vice-president of OSB.

 

Source: LBM Daily, October 19, 2007

 

 

Improvement in Mortgage Market Bodes Well for Housing in 2008

 

Conditions in the mortgage market are improving for consumers, which should help to release some pent-up demand in early 2008, according to the latest forecast by the National Association of Realtors®.

 

Lawrence Yun, NAR senior economist, notes that widening credit availability will help turn around home sales.  “Conforming loans are abundantly available at historically favorable mortgage rates.  Pricing has steadily improved on jumbo mortgages since the August credit crunch, and FHA loans are replacing subprime mortgages,” he said.

 

Yun said it’s important to place the current housing market in perspective, and that 2007 will be the fifth highest year on record for existing-home sales.  “Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year – a lot of people are, in fact, buying homes,” he said.  “One out of 16 American households is buying a home this year.  The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains.”

 

He emphasized all real estate is local with naturally large variations within a given area.  “Markets like Austin, Salt Lake City and Raleigh have been outperforming recently and will continue to do well next year,” Yun said.  “Other areas like Denver and Wichita will likely move up in the price growth rankings due to very positive local economic developments.”

 

Existing-home sales are expected to total 5.78 million in 2007 and then rise to 6.12 million next year, in contrast with 6.48 million in 2006.  New-home sales are forecast at 804,000 this year and 752,000 in 2008, down from 1.05 million in 2006; a recovery for new homes will be delayed until next spring.

 

Source: National Association of Realtors, October 10, 2007

 

 

NLBMDA Releases Delivery & Fleet Safety Program

Industry-specific training package helps ‘protect LBM people, product, property’

 

The National Lumber and Building Material Dealers Association and LBM Institute have completed production of Delivery & Fleet Safety, the only load transportation training program specific to the lumber and building material industry.  The latest, and much anticipated, LBMI project designed to protect people, product and property at lumber yards nationwide has already fulfilled a number of pre-orders and is now ready for regular purchase.

 

Since truck deliveries are one of the most costly safety issues in the LBM industry, the Delivery & Fleet Safety training video and accompanying workbook take drivers through the process of loading, securing and transporting building materials safely from the yard to the job site.  Created with the consultation of multiple LBM dealers across the country, the program covers regulations pertinent to LBM drivers on topics from building loads and branding strapping to surveying delivery sites for problem areas and unloading.

 

The video also provides information on acquiring a Commercial Driver’s License and maintaining rules governed by the Department of Transportation’s Federal Motor Carrier Safety Administration and the Occupational Safety and Health Administration—two agencies with which NLBMDA continues to foster good working relationships.  The full Delivery & Fleet Safety program includes the training video on VHS and DVD, one trainer’s guide, 10 operator training workbooks and program completion certificates and one full-color poster outlining the program’s concepts.

 

The video begins by showing footage of a trucking accident on a busy stretch of highway in the Washington, D.C., suburbs that occurred due to an improperly secured load.  As the truck entered an overpass, the load shifted and then tumbled over the road’s guardrail, where it struck an automobile below and killed its driver.  That accident is just one example of the 5,500 lumber industry-related, large trucking accidents a year, according to a 2006 FMCSA report—and it’s indicative of every driver’s need for proper safety training.

 

To help dealers train their employee