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FMI Releases 2013 U.S. Construction Industry Talent Development Report

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FMI, a leading provider of management consulting and investment banking* to the engineering and construction industry, announces the release of its 2013 U.S. Construction Industry Talent Development Report. The report is based on responses nationwide from a mix of general contractors and construction managers at firms of all sizes and specialties, including mechanical/plumbing and heavy/highway/civil.

More than half of respondents report a shortage in skilled labor. As a war for talent begins, construction experts must evolve their methodology of searching for the best and brightest employees. First, construction careers must be made more appealing to women and minorities. Second, there must be an appeal to today’s youth through career counselors, career fairs and utilization of social media channels.

In addition, as baby boomers retire, more than 75 percent of those surveyed said they were preparing for a leadership transition in three ways:

  1. Promoting internally
  2. Training to improve performance
  3. Providing internship and co/op programs

    4.  
    Also, more than half of those surveyed said they were:

  1. Identifying gaps in core competencies
  2. Increasing recruiting efforts at schools and universities
  3. Employing “best practices” to retain key talent

 
To download a copy of the full report, click here. For reprint permission or to schedule an interview with the author, please contact Mike Gauss at mike@articulon.com.

About FMI:
FMI is a leading provider of management consulting, investment banking* and research to the engineering and construction industry. We work in all segments of the industry providing clients with value-added business solutions, including:

  • Strategic Advisory
  • Market Research and Business Development
  • Leadership and Talent Development
  • Project and Process Improvement
  • Mergers, Acquisitions and Financial Consulting*
  • Compensation Benchmarking and Consulting
  • Risk Management Consulting

 
Founded by Dr. Emol A. Fails in 1953, FMI has professionals in offices across the U.S. FMI delivers innovative, customized solutions to contractors; construction materials producers, manufacturers and suppliers of building materials and equipment, owners and developers, engineers and architects, utilities, and construction industry trade associations. FMI is an advisor you can count on to build and maintain a successful business, from your leadership to your site managers. For more information, visit www.fminet.com.

*Investment banking services provided by FMI Capital Advisors, Inc., a registered broker-dealer and wholly owned subsidiary of FMI.

Nonresidential Construction Index Drops in Fourth Quarter

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FMI, a leading provider of management consulting and investment banking* to the engineering and construction industry, announces the release of the 2013 Fourth Quarter Nonresidential Construction Index report. The NRCI shows a 2.9 point drop in the fourth quarter to 57.4. However, the score is still ahead of fourth quarter 2012 by 1.9 points. An NRCI of more than 50 indicates growth, therefore the fourth quarter score still indicates modest improvement in the industry.

One of the reasons cited for the slight decline is the political infighting and uncertainty. Proceeding with caution by investors seems to be the new norm.

Productivity continues to slide. The 48.6 score is at its lowest since the second quarter of 2008. Ultimately, attention to productivity and profit margins will be key to sustaining growth going forward.

Building construction continues to improve since 2012. However, growth is still unsteady as the numbers have slipped 7.5 points to 64.1 this quarter. Material and labor cost also continues to rise causing the overall NRCI to fall.

To download a copy of the full report, click here. For reprint permission or to schedule an interview with the author, please contact Mike Gauss at mike@articulon.com.

About FMI:
FMI is a leading provider of management consulting, investment banking* and research to the engineering and construction industry. We work in all segments of the industry providing clients with value-added business solutions, including:

  • Strategic Advisory
  • Market Research and Business Development
  • Leadership and Talent Development
  • Project and Process Improvement
  • Mergers, Acquisitions and Financial Consulting*
  • Compensation Benchmarking and Consulting
  • Risk Management Consulting

 
Founded by Dr. Emol A. Fails in 1953, FMI has professionals in offices across the U.S. FMI delivers innovative, customized solutions to contractors; construction materials producers, manufacturers and suppliers of building materials and equipment, owners and developers, engineers and architects, utilities, and construction industry trade associations. FMI is an advisor you can count on to build and maintain a successful business, from your leadership to your site managers. For more information, visit www.fminet.com.

*Investment banking services provided by FMI Capital Advisors, Inc., a registered broker-dealer and wholly owned subsidiary of FMI.

FMI Predicts U.S. Construction Put in Place Will Reach $977 Billion in 2014

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FMI, a leading provider of management consulting and investment banking* to the engineering and construction industry, announces the release of its 2014 U.S. Markets Construction Overview. With construction put in place at the end of 2013 expected to be at $909.6 billion, researchers at FMI predict CPIP growth rates to be slightly ahead of the GDP in 2014.

Other predictions include:

  • Residential CPIP is anticipated to grow from $338.2 billion in 2013 to $379.6 billion in 2014.
  • Health care CPIP is expected to grow 6 percent in 2014 to $44 billion.
  • Transportation construction should finish 2013 with an 8 percent increase; 2014 predictions show a decrease to 7 percent growth.
  • Manufacturing construction is on the upturn, expected to grow 4 percent in 2014, after its 2 percent drop in 2013.
  • Sewage and waste CPIP should reach $21.3 billion in 2014.

 
With moderate growth predicted marketwide, there are key trends to watch that will likely affect various sectors and regions in the U.S. Presenting both threats and opportunities are:

  • The shift from shale-gas to shale-oil production has led to projections that the U.S. will produce more oil than it imports by late 2014.
  • The federal government’s fiscal difficulties continue to create business uncertainty. Many are worried about the federal debt and the government’s solution to address the problem.
  • Implementation of the Affordable Health Act is causing concern, as repercussions are anticipated.
  • With baby boomers continuing to retire, succession planning and a search for talent remains one of the industry’s primary challenges.
  • Modularization and prefabrication is expected to play an increasingly vital role in improving the productivity of the entire construction value chain.
  • As a result of the expansion of the Panama Canal, U.S. coastal infrastructure opportunities will create significant corridors of construction activity starting as early as 2014.

 
FMI publishes the U.S. Markets Construction Overview annually. To purchase a copy visit www.fminet.com/resources. Members of the media may request a complimentary PDF file of the Overview by clicking here.

About FMI:
FMI is a leading provider of management consulting, investment banking* and research to the engineering and construction industry. We work in all segments of the industry providing clients with value-added business solutions, including:

  • Strategic Advisory
  • Market Research and Business Development
  • Leadership and Talent Development
  • Project and Process Improvement
  • Mergers, Acquisitions and Financial Consulting*
  • Compensation Benchmarking and Consulting
  • Risk Management Consulting

 
Founded by Dr. Emol A. Fails in 1953, FMI has professionals in offices across the U.S. FMI delivers innovative, customized solutions to contractors; construction materials producers, manufacturers and suppliers of building materials and equipment, owners and developers, engineers and architects, utilities, and construction industry trade associations. FMI is an advisor you can count on to build and maintain a successful business, from your leadership to your site managers. For more information, visit www.fminet.com.

*Investment banking services provided by FMI Capital Advisors, Inc., a registered broker-dealer and wholly owned subsidiary of FMI.

FMI Issues the Q3-2013 Construction Outlook Report

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The markets continue to shift, reducing annual Construction-Put-In-Place predictions to $909.6 billion, down nearly $4 billion from previous predictions. Early forecasts for 2014 show annual CPIP continues moderate growth of 7%, rising to $977 billion.

Major market predictions include:

Residential Construction — FMI continues to forecast traction in residential construction. However, the growth is expected to taper off to 12% in 2014. Total predicted residential forecast is $379.6 billion, compared with the $338.2 billion for 2013.
Commercial Construction — The current forecast calls for a 5% increase in 2014. Although retail sales as of June 2013 were up 5.7% over the previous year, new bricks and mortar retail space along with commercial other construction growth will remain slow to recover.
Healthcare —With business owners nervous about the costs of the Affordable Healthcare Act, predictions are slightly unstable. Although the healthcare construction forecast slipped 1% since last year, it is still expected to grow 6% in 2014 to $44 billion.
Educational — The increase in residential construction and tax revenues will help bring this market back in many areas of the country. Due to budget cuts for government spending at all levels, the national market will rise only slightly in 2014 to 4% over 2013 levels.
Manufacturing — The resurgence of the automotive industry is a big boost to manufacturing as is the continuing explorations and mining for shale oil and gas. However, manufacturing construction is expected to drop 2% by year-end 2013 before returning to 4% growth in 2014.
Highway and Street — Passage of MAP-21 calls for nearly $38 billion for the fiscal year 2014 for the Federal-Aid Highway Program. This is a major contributor to the CPIP predications of nearly $80 billion for 2014.

While there is no singular reason for change in these markets, there are a few economic concerns that touch all of them.

Potential conflicts with Syria
Downsizing of government and large companies
The implementation of Affordable Healthcare Act

FMI Release Q3 Non-Residential Construction Index

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The NRCI score of 60.3 is a .2-point improvement over Q2. Although the numbers aren’t drastically rising, the sustainability and continuing upward movement is encouraging. This score remains the highest score for the NRCI index since Q1 2009. The index for the overall economy rose to 72 points and the combined index sentiment for economies where panelists are doing business rose 3.2 points.

Cost of construction materials, cost of labor and productivity continue to hold down the index. Additionally, investments in technology, equipment and training are needed to keep the economy from going stagnant.

Panelists for this quarter’s NRCI suggest that the uncertainty for investments is a result of the immigration/labor bills, delays in implementation of “Obamacare” and the impact of residential growth on nonresidential construction. These issues are causing the industry to sit back and wait to see the outcomes before making any risky investments.