FMI's E&C Industry Insight

Health Care Construction Market Trends By Kevin Haynes Between 2012 and 2015, the U.S. health care construction market is forecast to grow by more than 30% to reach $55 billion. During the last several years, our clients have frequently asked us to provide insight and analysis on this market. The graphic below shows where the projected demand will be most likely to occur by state. To create this map, the top 100 planned health care projects (by volume) across the country were segmented by location. As depicted in the graphic, the leading states for future hospital work include New York, California, Illinois, North Carolina and Texas. Leading States for Planned Health Care Construction Projects

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The Federal Construction Sector: Understanding a Transforming Market By Tim Sznewajs Based upon federal budget constraints, shifting national security priorities and a diverse set of owners with multiple objectives, the federal construction market is transforming rapidly. Given these changes, it is increasingly important for companies working in this space to comprehend the key forces accelerating these changes, as well as the shifts that are affecting the design and construction industry as a whole. Keeping an eye on movements and events – both within the federal construction sector and beyond its boundaries – will lessen the surprise factor and help companies prepare themselves for the next challenge. Some of the key trends that are shaping the federal design and construction industry in the coming years include:

• A decrease in overall funding levels driven by budget constraints and large federal debts
• A continued emphasis upon sustainability and energy efficiency in order to achieve larger policy goals
• The lasting reality of federal small business initiatives

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Create a Culture of Wellness By Kelley Chisholm Health and wellness is a hot topic for many companies that are trying to lower rising health care costs while at the same time improve employee health and well-being. A healthy and happy workforce usually translates into fewer injuries, reduced absenteeism, higher retention rates and increased productivity, which in turn helps the company’s bottom line. One thing that an organization can do to promote healthy lifestyles for its employees is to create a workplace wellness program and embed it into the company culture.

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Construction Project Health: The Story of Earned Value By John Chaney Guest blogger John Chaney, co-founder of Dexter + Cheney, a Seattle-based company that specializes in construction management software, shares his thoughts on earned value. For those of you who read my last blog on cash flow management, you may have been left wondering exactly how you are supposed to keep track of your construction projects’ job costs. Fortunately, there is a simple, but powerful measurement that will help you know when your project is healthy, and when it’s in trouble: earned value.

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Developing High Potentials By Ashley Sisk Avoiding turnover completely is unlikely, as it is not always easy to increase salaries or benefits. In most cases, a little turnover is welcomed, especially in the case of low performers. While losing low performers can enhance the bottom line, losing talented high-potential employees can negatively affect the bottom line. FMI asked in its 2011 U.S. Construction Industry Talent Development Report if your company had a formal process to develop high-potential employees. Comments indicated that the process of developing high potentials exists, but results showed that only 38% of companies have a formal process. Furthermore, when asked if this was part of a structured management succession process, 71% of respondents said no.

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FMI’s First Quarter Construction Outlook, 2012 By Randy Giggard FMI’s forecast for total construction put in place for 2012 is an increase of 5% over 2011, or $826.3 billion. We expect 2012 to be the turning point for a long-depressed construction industry. Of course, we must temper that with a number of caveats in our report. Nevertheless, if our forecast seems moderately optimistic, note that the last time construction put in place was at this level was 2000-2001. One of the keys to this growth is the return of private investment in projects as state, local and federal construction dials back until budgets are in better repair and tax revenues return to levels that are more normal. That is a big “if,” but there are signs in the markets reviewed in FMI’s First Quarter Outlook that this is starting to happen.

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Construction Cash Flow – Your Project’s Lifeline

By John Chaney

FMI is happy to welcome back John Chaney, co-founder of Dexter + Cheney, a Seattle-based company that specializes in construction management software, for his thoughts on construction cash flow.

Whether you work in a construction accounting department or are a project manager, cash flow is important to your everyday work. The accounting staff needs enough cash in the bank to pay bills and project managers need enough to complete jobs. So why is cash flow so difficult to manage?

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The Science of Efficiency and Productivity By Gregg M. Schoppman The race to the bottom has been fierce and bloody. The current perception of the marketplace revolves around being the low-priced provider with little room for value propositions. Contractors routinely lament about customers only caring about the bid and the continual downward pressure on price has further fueled this belief. There are plenty of contractors that are manipulating the market and “buying work.” As long as there is one bidder willing to work for cost, or even less in some cases, the paradigm of low cost providers will win. A less popular phenomenon, but one that bears contemplation, is that some of these “buying” contractors are in fact more efficient and productive than are their peers. “There is NO WAY the competition can do it for that,” is a fairly bold proclamation heard throughout contractor bid war rooms daily. What if even 50% of the competition is able to not only to do it for that price but also make money in the process?

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Cloud Computing – It’s Here to Stay By John Chaney Every now and then, we will be having guest bloggers to contribute to our pages. For this post on cloud computing, we welcome John Chaney, co-founder of Dexter + Cheney, a Seattle-based company that specializes in construction management software. “The cloud” seems to be everywhere – I think every time I turn on the television, I see a commercial for something “in the cloud.” Not too long ago, I saw commercials from a well-known company that proclaimed in a super-hero-like fashion, “To the cloud!” And most recently, we’ve heard quite a bit about the iCloud. I’d be understating the obvious if I said that cloud computing is the latest buzzword. However, I think there are a number of misconceptions about what the cloud really is, and what it means for businesses large and small.

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How Is Your Company Using Social Media? By Ryan Howsam   What is social media? It is a collection of online media, such as Facebook, LinkedIn, YouTube and Twitter, that allows people to engage and network with one another through talking, sharing and collaborating. With the vast majority of business people accessing the Internet every day, you cannot afford to ignore the opportunity social media provides. The objective of any marketing effort is to improve the bottom line. In the past, media such as a newspaper or television report was a one-way street marketing effort; today social media is a two-way interactive dialogue. The value of social media to the construction industry is simple – to inform, communicate and engage with people to create long-term and loyal relationships with today’s clients and tomorrow’s potential customers. You engage your audience when you convey to them something of value. The selling of your services will come later when your audience sees a need for your expertise. In order to leverage this value, social media must be a part of your marketing strategy and talent recruitment. Every time customers and potential employees in your market conduct a Google search relevant to your industry, you must have a presence they can engage with, or you risk losing them to competitors who do.

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