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Message From the President
Building Materials Price Volatility Remains a
Concern
As a builder and general contractor, I'd like
to update
you on the volatility in materials prices,
which may
impact current building projects. Since
early 2004,
the overall effect has been an increased cost
for
offices, industrial buildings and remodeling
projects.
The current situation has been caused by global
pressures such as the diversion of wood
supplies to
Iraq, price increases for specialty metals
used in the
production of steel and China's ravenous
appetite for
steel and scrap. The U.S. consumes 13% of the
world's steel products, but China is almost
three
times larger in production and consumption.
Higher
crude oil prices have driven up the costs of
petroleum-based products, such as roofing
shingles,
and have led to higher transportation costs.
Shipping
capacity has also been strained. A year ago
a tanker
cost $35,000 per day. Today it's $135,000.
Analysts believe that we are nearing the peak
of a
commodity price cycle, but it will take more
than a
year for the global supply - demand imbalance to
correct itself. Why? Steel products are
profitable,
so more plants will be coming online.
Additional
shipping capacity will be added. U. S. steel
prices
are set above the global rate, so there is an
incentive to sell more to the American market.
Because of these factors, analysts are
forecasting
moderately declining steel prices in the
second half of
2005, with more significant reductions in 2006.
This rationale fuels my optimism, but I'm not
ready to
tell you that we've begun to see signs
indicating a
return to pre-2004 times of flat or falling
prices,
abundant supplies and prompt deliveries. The
price
of steel used for beams, angle irons,
reinforcing rods,
sheet metal work, furnaces, water heaters, air
conditioners and appliances went up nearly
80% in
2004 and continues to increase. Steel stud
prices
increased by 300%. We expect a 20% metal
building
material price increase in 2005. Prices for
lumber and
nails, concrete, pipe, wire mesh and rebar
cost 50%
more. For example, a 4x8-foot sheet of OSB has
increased to $21 from $8.50. The framing lumber
composite price rose to $443 per thousand board-
feet from $279. Copper and steel mill products
jumped 43%. Gypsum is up 20%. With lean cement
inventories, high shipping rates and rail
bottlenecks,
we will see spot shortages and more than an 8%
price hike which is expected to peak in the
first half
of 2005 due to Florida's post-hurricane
reconstruction
efforts.
Proactive measures will help Munger to navigate
these volatile waters and provide fiscal
confidence
for our customers. First, customers should
revalidate
their Munger quotes before securing financing.
Second, Munger superintendents are striving
to keep
their projects on a fast-track. Third, through
escalation clauses that account for sudden
jumps in
material costs, we ask that the building
owner pay
the actual price invoiced by the supplier,
and avoid
overpaying if price escalation does not occur.
If you would like to learn more about Pat Munger
Construction, please contact me.
David A. DeMaio, President
daviddemaio@mungerconstruction.com
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Greetings!
Thanks for reading our newsletter. We hope
that you
find the content to be timely, appropriate and
beneficial.
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| Recent Success Story |
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Massey Properties develops and leases
space for commercial and light industrial
clients.
There are currently seven Massey properties
with an
eighth nearing completion at 758 East Main
Street in
Branford.
Pat Munger Construction has provided building
services for each Massey property including
the new
Branford site. "We have a repetitious
relationship
with Munger. They're also in it for the long
haul",
stated Massey. "Their professionals have
pride in
quality workmanship - an old time work ethic,
a dying
breed.
After receiving the architect's rendering for
the
Branford facility, Munger produced a basic
rectangular shell with intricate columns spaced
outside the building footprint. Munger built
the
foundation to support a Varco Pruden shell
infrastructure for Massey's metal panel and
plate
glass system walls. The metal panels are
comprised
of a maintenance-free polycarbonate-aluminum
composite skin similar to that used on NASA
spacecraft. It provides high energy U and
R-values
to optimize heating costs. The plate glass
system is recessed toward the inside,
providing the
visual effect of exterior columns, encased
within the
metal panel systems. It delivers natural light
throughout the building.
Munger installed a VP metal standing seam
roof on
parapet walls that rise above the roofline,
which
slopes toward the rear and is invisible from
the front
of the building. It is piped into the site's
drainage
system. Munger provided interior mechanical
plumbing along with metal stud framing and
drywall
utilizing its own skilled carpenters.
The building design enables the flexibility
needed for
Munger to efficiently provide interior fit-up
to meet
the unique needs of Massey tenants.
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| Work-in-Progress |
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Pat Munger Construction is nearing completion
of a
new headquarters and show room for The
Trailer Depot. Munger's turnkey
design/build solution will result in an
aesthetically
fitted Varco Pruden pre-engineered steel
building
topped with a colorful metal standing seam roof.
The Trailer Depot provides trailers, hitches,
accessories, installation and repair services to
consumer, business, agricultural and government
customers. "Having outgrown our current
facility,
we need more outdoor space for our trailer
inventory
and more inside space for a showroom, retail
parts
and offices", said Mike Duhamel, Vice
President. "Our
new building in Northford provides a rustic
look and
convenience that will please customers."
After finding affordable space that satisfied
their
outdoor needs, they began a search for a quality
builder. Duhamel and his team relied on
friends who
had invested in buildings with the look and
feel they
required. VanWilgen's Nursery in Branford
and the
Town of North Branford Public Works Department
highly recommended Pat Munger Construction.
Duhamel stated, "They were very satisfied
with their
Munger building. After visiting their sites,
we knew
whom we wanted to build for us."
Munger designers turned Duhamel's hand-drawn
sketch into a cost effective, aesthetically
pleasing
design. Taupe cedar shake siding, boysenberry
colored roof and wood shingle covered porch with
overhang provide a very desirable country look.
When inside, customers enjoy a waiting area with
coffee bar and antique farm tool décor.
Duhamel said, "Munger builds win/win
relationships
and is easy to work with because of their
professionalism and attitude. Everyone seems
happy
to be at work. Their team takes ownership
for on-
time delivery with no excuses. We are impressed
with their honesty and integrity."
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| Company News |
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We have redesiged our website
to provide a look and feel that is
consistent with
our identity. Our site differentiates us by
making it
easy for people to do business with Munger.
Our goal
is to position Munger in the mind of the
architect,
subcontractor and building owner as having
the specific talents they need from their
partner.
Visitors will learn about Munger by frequently
browsing for fresh content and ideas. They
will learn
about Munger in a self-service mode and we
will learn
about their interests.
Please visit
us on the web at www.mungerconstruction.com.
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| Emloyee Spotlight |
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Joe Pierandi joined the Munger team in
March
1998 bringing with him 20+ years experience
in the
construction field. Carpentry is his specialty.
Joe's primary Munger role is project
superintendent.
He works with building owners, architects,
subcontractors and vendors as he coordinates all
aspects of a project from start to finish.
Two of his
more recent success story projects include Total
Tree Care and The Trailer Depot.
Joe lives in Wallingford with his wife, Fran
and their
three beautiful daughters - ages 9, 7, and 4.
Along
with participating in as many family
activities as
possible, he also enjoys fishing and playing
pool.
Joe is well liked and highly respected by his
peers,
customers and subcontractors. He is a
"hands-on"
person who not only manages projects, but
leads his
team by example as he applies his skills in
the field.
He is adept at interpreting drawings with
precise
attention to detail. Joe solves problems by
resolving
any issues he encounters swiftly and
skillfully. We
are fortunate to have Joe as a member of the
Munger
team. Thanks Joe!
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| Tech Tips |
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Accumulating snow acts as an insulator
between the
outside cold and a building roof. Normal
heat loss
and solar rays warm the roof causing the snow to
melt. When the snowmelt runs down the roof and
reaches the overhang, it begins to freeze,
especially
if the gutters and downspouts are blocked. This
often causes ice dams to be formed at the roof's
edge, in valleys and near dormers, which
prevents
melt water from flowing off the roof.
Instead, the
water flow backs up underneath the roofing
materials
and freezes. When the ice melts, it leaks
through
the roof, causing roof and interior damage.
Building owners should ensure that gutters and
downspouts are cleaned regularly and that ice
and
snow do not block the drainage downspouts at
ground level. Consider installing roof &
gutter cables
and heat tapes to prevent water damage caused by
snow and ice buildup in metal or
plastic/vinyl gutters
and downspouts. They work in conjunction with
natural sunlight and a building's own heat
dissipation.
When natural thawing occurs, the cables create a
channel that allows water to flow off the
roof and
through gutters and downspouts. They are easy to
install for years of trouble-free operation.
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