I would say that the most significant impact, this is now I’m talking from my own experience, will generally come on tubular products and other products that support the energy industry like SBQ products. That is where we would see it in our order book more than anything else as well as a decline in demand for construction spending. Having said that, we still see a strong order book, a strong backlog. I think a more measured approach by some of those that are dependent on energy money for construction spending going forward, but it really has not sorted itself out in a negative way other than from an apprehension or anticipation, but the order book remains strong.
Evan Kurtz, Morgan Stanley
Do you have any visibility in your order book, which projects are energy related and what sort of percentage that might be of the total book?
Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Yes, we will take that as a follow up. We would include part of that in wind farms, which taking above construction spending and energy prices even with oil coming down,there is still a desire in part of the government to stimulate spending on alternative forms of energy and that so far is continued. That is one example where we have a very direct impact as a result of energy pricing where so far there has been almost no reaction whatsoever.
Barbara Smith, SVP and Chief Financial Officer, Commercial Metals Company
I would add and like to point out, Evan, that lower energy prices could provides some positive momentum around the renewal of the transportation bill and I think that discussion is only beginning but it might create an opportunity where they can find the funding mechanism and that could be a real positive that is right now not factored in anybody’s outlook.
Evan Kurtz, Morgan Stanley
That is an interesting point. Thanks. I will turn it over.
Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Thanks,Evan.
Operator
Our next question comes from Sal Tharani at Goldman Sachs.
Sal Tharani, Goldman Sachs
Good morning, guys.
Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Good morning, Sal.
Sal Tharani, Goldman Sachs
I want to ask a couple of questions. You mentioned conversion costs in fabrication were up. Any particular reason? Is this a recurring stuff or was this some one-time item?
Barbara Smith, SVP and Chief Financial Officer, Commercial Metals Company
Well, due to the stronger order book in fab, we did incur some additional freight just to meet some of the commitments and we have done some staffing up in preparation of the busier time in the year. That will equal itself out as time goes forward.
Sal Tharani, Goldman Sachs
Okay. This next one on European demand. You mentioned obviously you had some down time but you also mentioned some weak demand. I am just wondering what are you seeing as we exit the winter. I know winter is going to be slow at Poland. Beyond that, what is your outlook over there?
Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Yes, growth in Poland is substantially stronger this year as compared to last year. You might recall that last year in the first quarter was when the Latvian situation got resolved. We saw a really, really strong order book in the first quarter. The European economy – well, the economy in Poland particularly – continues to grow and we expect strong demand. The pressure that we are seeing is really a function of imports. Not only weakness in the Euro zone but some carryover from what is going on in Eastern Europe.
We have seen some imports coming from neighboring countries that we have not seen before which is putting pressure on prices and margins, but we expect strong demand to continue. The Polish economy continues to do better than most of the rest of the European economies orother countries in the Euro zone. We do not see any reason for that to tail off. What we would like to see is less influence from imports and stronger margins.
