Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for Nov. 9, 2012
*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.
Lumber: Early sales activity in the SPF lumber market gave mills the opportunity to again raise prices. Order files extending into the last week of this month also provided impetus for the single-digit price gains. Western mills continued to ship significant volumes overseas to Asian markets. Southern Pine lumber producers noted a slower pace early, but the totality of sales made for a fairly strong week. Mill order files, stretching into or through the Thanksgiving week, contributed to strong price hikes. Coastal species lumber buyers again purchased enough volumes to force mill prices higher. A number of buyers finished purchasing early, prior to leaving for the NAWLA Traders Market. This generated a slower pace to the market later in the week. Inland lumber producers, like most others, had a slight temporary reaction to the election, but the market disregarded any negativism and continued to forge stronger numbers. Ponderosa Pine industrial lumber is stable, from P99 through Mldg&Btr. Prices are unchanged, and even the #2 Shop, which has struggled all year, is less dramatic in its weakness. Neither Ponderosa Pine nor Eastern White Pine boards showed any change in prices, and wholesalers report that their activity is similarly slow for the time being. A number of market mavens in Western Red Cedar made their way early in the week to the NAWLA Traders Market. For those that stayed behind to man the phones, sales for shipment this year were light.
Panels: OSB prices continued to move upward, in some cases by substantial margins. This is the case in all producing regions, with the greatest pressure coming in the Mid-Atlantic and Southeast regions. Distribution and retail yards were the driving force behind "decent" mill sales in the Southern Pine plywood market. Order files moved into the week of Nov. 26. Extended lead times helped mills increase a few sheathing prices. A fairly modest sales pace did not keep Western Fir plywood producers from raising prices on some items. Most order files ran in the range of Nov. 12 out to Nov. 26, depending on the item. Producers with quicker shipping volumes were able to work that to their advantage. Prices have paused for the time being in Canadian plywood. The delivered baseline for 9.5 mm CSP remains C$366, established last week after some aggressive buying among distributors. Those buyers now have wood coming to them, so they have reined in their activity. Particleboard buyers kept a close eye on inventories heading into the latter stages of the year. Moulding manufacturers continue to buy strong volumes from MDF producers.
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Sherwin-Williams to buy Mexican paint giant
Cleveland-based Sherwin-Williams Co. agreed to acquire Consorcio Comex, S.A. de C.V., a leader in the paint and coatings market in Mexico with headquarters in Mexico City.
Comex sells architectural and industrial coatings in Mexico through 3,300 units operated by 750 concessionaires. Sherwin-Williams will pay approximately $2.34 billion, including assumed debt, in an all-cash transaction, the company announced Monday morning.
In the United States, Comex sells paint and coatings products under a variety of brand names through 240 company-operated paint stores. In Canada, the company markets multiple brands of paint and coatings through 78 company-operated paint stores and approximately 1,500 independent paint dealers.
"Sherwin-Williams and Comex Group are an ideal fit in every respect — geographically, strategically and culturally," said Christopher Connor, chairman and CEO of Sherwin-Williams, in a prepared statement. "This transaction will significantly increase our presence in markets where our store count is low, it builds upon our strategy to grow our architectural paint business in the Americas and it brings a high-quality, dedicated team of employees to Sherwin-Williams. We are proud to welcome such a well-respected company and their employees into the Sherwin-Williams family."
In the same press release, Marcos Achar Levy, CEO of Comex, said, "We are very pleased and excited to join the Sherwin-Williams team and look forward to making a major contribution to the company’s ongoing success across the Americas. We have respected Sherwin-Williams for years, and are delighted to now be a partner. Comex and its committed employees know Sherwin-Williams well, and I am confident that joining the Sherwin-Williams family will provide an outstanding future for our employees and customers."
Founded in 1952, Comex is a privately held business with operations in Latin America, the United Statesand Canada. In 2011, Comex had total annual sales of US$1.4 billion.
Hurricane raises wage and hour issues
Unusually severe storms like Hurricane Sandy can result in unusual working arrangements that raise out-of-the-ordinary wage and hour questions.
Suppose employees volunteer to perform recovery services for employers. That may sound nice, but “the Fair Labor Standards Act (FLSA) does not permit employees to volunteer unpaid time to the employer under any but the narrowest of circumstances,” Lawrence McGoldrick, an attorney with Fisher & Phillips in Atlanta, told SHRM Online.
“For example, if a manufacturing facility sets up a hotline or makes other arrangements to provide a clearinghouse of information about the status of the workplace and employee reporting times, nonexempt employees volunteering to perform such services are engaged in compensable hours worked for FLSA purposes,” he said. Employers considering any kind of unpaid “volunteer” services by their employees should evaluate carefully and in advance the legality of this work, he said.
Emergency job duties
Sometimes, job duties change temporarily after a storm with FLSA consequences, Barry Miller, an attorney with Seyfarth Shaw in Boston, said in an Oct. 30, 2012, interview.
For example, someone who performs white-collar job duties usually may be called on to clean up. An employer changing exempt employees’ duties should consider whether the workers lose their exempt status for a pay period before regaining it once they return to exempt duties, he recommended.
Miller doubted this situation would arise in most places affected by the storm, calling it “an extreme scenario.”
He said it could come up in particularly hard hit areas, such as Atlantic City, N.J., where casinos closed because of the storm. “That never happens. There’s got to be a huge amount of ramping down and ramping up there,” he said, adding that there might be “a huge interruption” in casino employees’ usual job duties.
Another question that arises often in the aftermath of storms is whether exempt employees’ pay may be docked. The answer is counterintuitive, Miller said.
The FLSA provides an incentive for employers to remain open during storms by allowing them either to dock exempt employees’ pay for full days they miss and do not work from home when employers stay open, or to require exempt employees to use vacation, if permitted by state law. (Partial-day deductions for exempt employees aren’t allowed.)
If employers are closed for part of the FLSA workweek, but exempt employees work part of that week, the exempt workers must be paid their usual salary and docking is prohibited.
Despite these strange FLSA rules, “the last thing an employer wants is for workers to get hurt coming to work” during a severe storm, so most employers close in spite of these provisions, he added.
Reporting pay laws
Ordinarily, nonexempt employees do not have to be paid if an employer is closed and nonexempt employees are not working from home.
If an employer fails to adequately alert employees that it is going to be closed and nonexempt employees show up for work, some states require that the workers be paid something for showing up.
For example, in Massachusetts, a “reporting pay” law requires that if an employee shows up for work when there is no work to do, the employer must pay the worker for at least three hours at the minimum wage rate, Miller noted.
Similarly, in New York, there is a “call-in pay” law that requires payment for showing up for four hours or the number of hours in the regularly scheduled shift, whichever is less, at the basic minimum hourly wage. The law is something of a misnomer since it applies when employees show up, not when they merely call in.
Most states that have such laws recognize that if the employer took reasonable steps to notify employees that it is closed, it will not have to pay employees who show up for work anyway, Miller said.
He noted that when there is a lot of cleanup after an office has closed during a storm, the normal overtime rules still apply if nonexempt employees work more than 40 hours as part of the catch-up activities.
Nonexempt employees also must be paid for on-call time if they are waiting to be engaged and are not free to use time for their own purposes. For example, if an employee must be able to report to the office in 10 minutes or check e-mail every five minutes, the on-call time would be compensable, Miller remarked.
“On-call time during a storm is compensable to the same extent that on-call time is compensable under any other scenario,” said Paul DeCamp, an attorney with Jackson Lewis in Reston, Va. The central issue “is whether the time is predominantly for the benefit of the employee or the employer.”
He noted that “during severe weather events, it is common for certain key nonexempt personnel to be on call to address emergencies in areas such as physical integrity of the employer’s property and any offsite facilities, as well as information technology. The question of whether that time is compensable is very fact-specific, but the analysis focuses on the extent to which the employee’s time is interfered with by virtue of being in on-call status.”
Going beyond the law
Some employers pay nonexempt employees when the office is closed, DeCamp noted.
“Many companies view weather days and paid absences for nonexempts as an important investment in employee relations and goodwill,” he remarked. “Employers want their employees to be safe and to maintain their standard of living. In some circumstances, that may lead employers to relieve workers of having to choose between risking their own safety to come to work or perhaps not being able to pay their bills.”
Allen Smith, J.D., is manager, workplace law content, for SHRM.
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