Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Jan. 12, 2018.
Western: regional species perimeter foundation
Southern: regional species slab construction
Crow's Market Recap: A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow's Weekly Market Report.
Demand for SPF gained momentum, particularly in eastern Canada. Interest among buyers involved all dimensions in #2&Btr, sending those prices higher at both eastern and western Canadian mills. Buyers continued to cover jobs while yards replenished after drawing inventories lower in December.
- Southern Pine #2 prices increased in large part due to fewer supplies available and sales momentum as the week progressed. Mills reported strong volumes sold, particularly in the latter half of the week. Warming temperatures as the week progressed aided consumption. Mill order files often extended out near the end of January as buyers purchased February needs.
- The Coastal species lumber market started out on mostly firm footing and grew in strength as the week progressed. Strong demand and barriers to any production increases placed upward pressure on prices.
- Inland lumber producers reported “an excellent week,” as buyers busied themselves with pre-spring ordering, leading to price increases in Fir-Larch and signs of firming in Hem-Fir. The strong demand combined with tight log supply to encourage a positive tone.
- Demand for 9-foot trims remained strong in the stud market while 8-foot sales activity gained momentum. Buyers purchased February needs, seeing less availability for shipment in January. Jobs continued to be covered.
- Radiata Pine industrials were reported unchanged in either Mldg&Btr or Shop.
- Ponderosa Pine industrials remained solidly priced in both Mldg&Btr and Shop. The 5/4 Shop remained a focus of buyers, pushing it up $5–10. Ponderosa Pine 4/4 material continued to be tight. High log prices were reported, which supported firm prices but caused concern among producers. Major buyers have filled January needs, giving mills more than adequate order files.
- Winter weather continued to disrupt consumption, but moderately warmer temperatures helped Western Red Cedar move from yards more readily. Producers reported decent sales for this time of year. Some Canadian producers continued to seek higher prices by raising quotes.
OSB markets showed a little more activity than last week with weather out of the deep freeze and everyone back at their desks. Though order files are only out a couple of weeks, transportation issues triggered by the cold have deliveries backed up. On the other hand, construction has slowed for the winter.
- Sales activity in the Southern Pine plywood market continued at a solid pace, moving order files out to the last week of January and keeping upward pressure on prices. Some lead times extended into early February. Cold weather experienced the week prior continued to pose production problems for a few mills.
- Western Fir plywood buyers remained active, leading to higher prices and mill order files extending into the weeks of Jan. 29 and Feb. 5. Mills approached CDX pricing more forcefully, raising quotes $25–30 by the week’s end. Traders expressed some surprise regarding the level of market strength in January.
- A fresh rally picked up in the Canadian plywood market as mills pushed order files farther out and buyers with thin inventories stepped in.
- Particleboard and MDF producers reported a fair amount of business for the beginning of a new year. Expectations involving a significant increase in buying sometime within the next month or so was clearly present.
For more on RISI, click here.
Regulatory Wrap-Up: Scheduling, paid leave return to the spotlight
Tipped Wage: The National Employment Law Project and the Restaurant Opportunities Center released a report this week aimed at discrediting the Labor Department’s proposed tip pooling regulation. The study states that over half of earnings for waiters (59%) and bartenders (54%) come from tips and the new rule would allow companies to take that money from workers, depriving them of a substantial portion of their income.
St. Paul, Minn.: The Citizen’s League, a nonpartisan public interest group, is holding “listening sessions” in conjunction with the city as the council considers a wage increase similar to the recently enacted $15/hr minimum wage in Minneapolis. Part of the discussion centers on adopting a local tip credit (which is unlikely).
Maryland: The General Assembly voted to override the governor’s veto of paid leave legislation that passed both chambers during the 2017 session. The bill is slated to become law in 30 days but could be extended to 90 days to allow for more time to comply. The law requires employers with 15 or more workers to provide five days of paid leave a year and applies to full, part time and seasonal employees. The bill contains no preemption language so localities in the state could still pass more generous proposals as is the case currently in Montgomery County, MD.
New Hampshire: A paid leave bill passed its first reading in the house and is moving through the committee process. The bipartisan bill allows workers up to 12 weeks of paid family and medical leave funded by participating employee quarterly contributions capped at .5 percent of weekly wages. The bipartisan bill has been well received and will likely have enough support and momentum to ultimately be enacted.
New Jersey: With the election of Phil Murphy as governor, the state is returning to full Democratic control and progressive legislation is expected to advance quickly. This week restrictive scheduling legislation modeled off other jurisdictions like San Francisco and Seattle was introduced in the senate. While wage and paid leave legislation are expected to be the first priorities, scheduling legislation could also become a priority of leadership.
Supreme Court: The U.S. Supreme Court announced they would hear the landmark Wayfair v. South Dakota case regarding the requirement that out of state sellers collect the state’s sales tax. The decision to hear the case was praised by the brick and mortar retail community as well as state governments that are currently barred from enforcing collection on many out of state sellers with no physical connection to the state. The case will be heard later this year and the announcement could increase pressure on Congress to finally act to level the playing field for both online and offline retailers.
Federal: The Trump administration released a guidance document which allows for states to apply for specific waivers to their Medicaid programs. The guidance was released in response to several requests from states to require some Medicaid recipients to work in order to receive benefits. Opposition groups will likely bring a legal challenge questioning the authority of the administrative action without the consent of Congress.
Supreme Court: The Supreme Court declined to take up the case Hall v. DirecTV. The Fourth Circuit ruled that DirecTV and its subcontractor were joint employers under the Fair Labor Standards Act because the two were not “completely disassociated.” This determination stands in contrast to the NLRB’s recent reversal of the Obama-era Browning-Ferris decision. For now, employers who depend on the franchising model or third-party contractors will need to keep an eye on further agency action and applicable circuit precedent.
NLRB: The Teamsters union has filed a suit in the D.C. Circuit Court of Appeals in an effort to restore the Browning-Ferris Industries precedent established under the Obama-era NLRB. The current NLRB overturned that precedent and the union is arguing that William Emanuel should have recused himself due to a conflict of interest.
Labor Department: Signaling a focus on compliance as opposed to the Obama-era focus on enforcement, Secretary Acosta revived a collection of opinion letters issued to employers in 2009 that were withdrawn under the Obama administration. The practice of issuing fact-based opinion letters specific to individual companies regarding their overtime and wage requirements is the preferred method of providing guidance to employers regarding their wage obligations under the law.
NLRB: President Trump officially nominated lawyer John Ring to serve on the National Labor Relations Board, replacing fellow Republican Philip Miscimarra whose term expired in December. Ring’s nomination needs to be approved by the Senate. Once seated, his placement will reestablish a 3-2 Republican majority on the board.
New York City: Several labor groups announced this week new revenue streams as a result of the 2016 city ordinance which allows fast food employees to insist their employer automatically deduct charitable contributions out of their paychecks and forward the money to a nonprofit of the employee’s choosing. Fast Food Justice announced that 1200 workers have agreed to contribute $13.50/mo. to the new organization which will work to advance higher minimum wages, affordable housing and immigration reform among other issues. The Restaurant Law Center has initiated a legal challenge to the city law.
Visa: Visa announced last week that it will move away from requiring signatures for most transactions beginning in April. Similar announcements from Mastercard, Discover, and American Express showcase the obsolete nature of the security measure. Merchants welcome the change as it will reduce transaction times for customers and could drive down interchange fee costs for the more expensive signature method.
Los Angeles: The city attorney filed a lawsuit against several port trucking companies alleging that truckers have allegedly been misclassified as independent contractors instead of regular employees resulting in exploitation and wage theft. The three companies, CMI Transportation, K&R Transportation and Cal Cartage Transportation have been the center of numerous complaints brought by truckers and were also featured in a series of expose stories published last year by USA Today. It is unclear if neighboring Long Beach, which jointly operates the LA/LB port, will take similar action.
- The decision by the Supreme Court to take up the South Dakota online sales tax case will have major reverberations throughout the state tax law community. Since the decision will not come until late spring at the earliest, state legislatures will continue to pursue legislative solutions that allow them more collection authority. The case could also spark renewed interest in federal legislation that would provide protections for smaller online sellers, protections that will not likely be granted in a narrower court decision. Merchants, both online and traditional, should pay very close attention to this case and the reactions of state policy makers.
- According to ICE officials, the 7-11 immigration raids this week are the first in what will be many more enforcement actions. A key tactic in the president’s overall approach to immigration is to portray some employers (often entry-level employers) as “magnets” for undocumented workers. As Trump plays to his base, employers will be portrayed as the villain. Since 2018 is an election year, employers need to prepare for both reputational challenges as well as the operational disruptions that these high-profile events entail.
- While Walmart’s increase in their starting wage to $11/hr is drawing national headlines, its commitment to 10 weeks of paid parental leave for full-time workers may be the most noteworthy development. That benefit level sets a new marker within the retail community that has implications for all employers in the fight to attract and retain quality workers.
Legislature Status for Week of 1/15/18
- The United States Senate is in session this week
- The United States House is in session this week
- Thirty-four state legislatures are meeting actively this week: Alabama, Arizona, California, Colorado, Delaware, Florida, Georgia, Iowa, Idaho, Indiana, Kansas, Kentucky, Massachusetts, Maryland, Maine, Michigan, Missouri, Mississippi, North Carolina, Nebraska, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Virginia, Vermont, Washington and West Virginia.
Check out our Working Lunch podcast each week that includes further analysis into these legislative issues, policy, politics and much more. You can find Working Lunch on the Nation’s Restaurant News website, or by clicking here, and when you download the podcast and subscribe on iTunes here.
The Regulatory Wrap-Up is presented by Align Public Strategies. Click here to learn how Align can provide your brand with the counsel and insight you need to navigate the policy and political issues impacting retail.
Trex spotlights its top builder partners
Trex Company, the decking and railing manufacturer, recently celebrated some of its top builder partners at its recent TrexPro Summit Awards.
Held last month in New Orleans, Trex honored contractors from across the country for their innovative use of Trex decking in a variety of outdoor living spaces.
"The TrexPro Summit Awards recognize the best of the best in our field and provide us the opportunity to showcase some truly distinctive desk designs," said Butch Palaza, director of global contractor development for Trex Company. "When it comes to creating the ultimate outdoor space, TrexPro Platinum builders bring invaluable insight and skill to both the design and the installation."
Five TrexPro Platinum contractors earned TrexPro Summit Awards in the following categories:
- Best Dock/Marina: Legendary Builders (Slatington, Pa.)
- Most Creative Project: Amazing Decks (Ambler, Pa., and Flemington, N.J.)
- Best Overall Project: DeckSouth (Marietta, Ga.)
- Stellar Service: Rock Solid Builders (McHenry, Ill.) and ProBuilt Construction (Highland, Md.)
TrexPro contractors are pre-screened and hand-selected professionals throughout the United States and Canada that have completed installation and product training on all Trex products, the Winchester, Va.-based company said.
Last month, Trex rebranded its SC Railing division as the new Trex Commercial Products division. In other company news, the division made its debut at the 2018 International Builders Show held last week in Orlando.