• Building Your Digital DNA: Five Key Steps

    Posted on June 9, 2016 by FMI Corporation

    Today’s new technologies allow industry professionals to link up and share project knowledge across integrated teams, 24/7, across the globe. When the Internet was introduced in the early 1990s, no one really knew that complete industries, cultures, governments and businesses would be transformed by this innovative platform for sharing information, learning and transacting. Nevertheless, what started out as a novelty of sorts has since grown into a 3 billion-strong web that’s accessible via the desktop computer to the 5-ounce mobile phone — and everything in between. Technological advancements are also reshaping the engineering and construction (E&C) space, where the evolution of design and construction functions has taken a leap forward with the transition from electronic drafting to high-resolution digital modeling (also known as Building Information Modeling or “BIM”). Thanks to ubiquitous digital connectivity, cloud computing, and big data, the E&C industry is undergoing a historic melding of engineering, architecture, fabrication, construction, and other related disciplines, undoing 100 years of expansive industry fragmentation.

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    This post was posted in Consulting, Research, Technology and was tagged with construction industry blog, construction industry, NRCI 2014 Q2, engineering industry, engineering blog, construction technology

  • 7 Ethics Best Practices for Construction Firms

    Posted on March 28, 2016 by FMI Corporation

    Driven in part by regulatory pressure, ethics programs are gaining prominence within firms whose leadership have made it a priority, and further throughout the industry, supported by associations like the Construction Industry Ethics and Compliance Initiative (CIECI) and the Associated General Contractors of America (AGC). At FMI, we regularly explore what motivates engineering and construction firms to invest in ethics programs, and how they facilitate awareness and enforcement of ethics policies. Here are seven best practices that we’ve identified through our research: 1. Ethics starts at the top – the leader must champion ethics policies, practices and attitude. Mitch Haddon, president and CEO of ColonialWebb, implemented a values system and leadership playbook after a period of company growth. The leadership playbook details the exact behaviors that managers should exhibit throughout the organization, a cue for the entire staff. “Common sense doesn’t appear ‘common’ until you have it written that way,” he explains. “The playbook for leadership behaviors creates the value system at all levels.”

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    This post was posted in Consulting, Research, Center for Strategic Leadership and was tagged with ethics, ethics construction industry, construction, NRCI 2014 Q2, business ethics, construction ethics, engineering ethics, engineering industry

  • FMI's NRCI Executive Summary

    Posted on June 2, 2015 by FMI Corporation

    At 64.9 for the second quarter of 2015, the NRCI score was essentially unchanged from the previous reading of 64.8. However, this result is a case where comparing the bottom line from quarter to quarter can be deceiving. However, it is more instructive to look at the underlying changes in the components of the Index. There the reader will find that panelists didn’t just copy their responses from last quarter. We also discovered some change in the direction of construction projects in response to our current issues questions concerning green construction and construction delivery methods, both reflecting changing owner demands.

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    This post was posted in Research and was tagged with Economy, FMI Corporation, FMI's NRCI, NRCI 2014 Q2

  • M&A Trends in Oil and Gas

    Posted on May 26, 2015 by FMI Corporation

    Shale gasThe energy infrastructure market has gone through a period of unprecedented expansion over the past five years and many companies exhibited exponential growth over this period. Only six months ago, most companies were preparing strategies for talent acquisition/retention and geographic/service line expansion. With the price of oil falling by more than 50 percent, many firms are being forced to cut costs and reevaluate strategy. The decline in oil prices has forced many producers to cut 2015 drilling capex. As a result, demand for upstream services, in particular, will begin to slow and margins will compress. Midstream and downstream markets will also be affected, but likely not until later in the year or until production begins to decline in earnest.

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    This post was posted in Investment Banking, Research and was tagged with Scott Duncan, Inc.

  • How to Capitalize on Market Information

    Posted on May 5, 2015 by FMI Corporation

    InvestmentBanking494507603Most successful companies in the oil and gas engineering and construction industry are constantly monitoring the market and staying abreast of the most recent trends. They try to best prepare for what the future will look like in the market and how the company will compete. One of the lessons FMI has learned is that market research must be placed in a proper strategic framework to guide your thinking and ultimately increase your ability to make the right decisions for your company’s future success. Without this framework, it is simply a collection of data points without a unified purpose. As seen in Exhibit 1, the strategic framework we suggest to our clients for implementation is the 4-C approach of climate, customers, competitors and company.

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    This post was posted in Investment Banking, Research and was tagged with Strategy, Oil and Gas Infrastructure Valuations

  • Data-Driven Estimating

    Posted on April 27, 2015 by FMI Corporation

    ConstructionBuilding179255070Create a fact-based filter for project selection and a data-driven mark-up policy that maximizes profitability. Construction is a competitive business. Especially in hard-bid markets, contractors compete fiercely for every project. The price the market will bear is sometimes determined by a few hundredths of a percent. Competition in the construction industry, however, should not be about winning projects; it’s about making a profit. In the construction industry, that profitable competition begins in estimating and pricing work.

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    This post was posted in Research and was tagged with Strategy, construction profitability

  • Nonresidential Construction Index Dips in Q3

    Posted on August 18, 2014 by Phil Warner

    FMI Nonresidential Construction Industry TrendsThe great man of letters and champion of reason, Voltaire might have been talking about climate change when he wrote, “Men argue. Nature acts.” Men and women argue about climate change and global warming, but nature does what nature does, be it drought, doldrums, snow, rain and hurricanes. Argue as we will, we inevitably enjoy and suffer the acts of nature. Much the same can be said about the economy. Pundits and politicians argue—incessantly—and the economic climate changes in spite of argument and often in reaction to climate change. For instance, nasty winter weather and a continuing drought in the West are among the key explanations for a slowing economy in the first quarter.

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    This post was posted in Research and was tagged with Construction industry trends, NRCI 2014 Q2, FMI's Nonresidential Construction Index 2014 Q3, NRCI 2014 Q3, Risk Management

  • Three Factors Driving the Convergence of Design and Construction

    Posted on June 11, 2014 by Sabine Hoover

    Building108531655For decades, mergers and acquisitions have shaped the design and construction industry’s business landscape. Through these mergers, companies have often achieved better economies of scale, branched out into new geographies and added new services and expertise. In the wake of the Great Recession, companies of all sizes have started to redefine themselves and we are seeing an increasing number of engineering and construction companies combining disciplines and expertise into full-service firms.

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    This post was posted in Research, Technology and was tagged with Design and Construction Industry, CH2MHill, Summer Internships

  • FMI's Q2-2014 Construction Outlook Report

    Posted on June 2, 2014 by FMI Corporation

    construction outlook reportYogi Berra once famously said, “Nobody goes there anymore. It’s too crowded.” Berra was responding to a question about why he had not been to a favorite, popular restaurant anymore.  In our case, we are using this bit of paradoxical humor as an introduction to our forecast, in particular to look at the changes in retail commercial construction and the changing construction industry in general. Berra’s quote will not help us explain why our forecast for the construction industry has been lowered 1% compared with last quarter’s Outlook forecast.  For that answer, we will try to explain below.  If there is one overarching theme to the global economy, someone is lying to you. Better to listen to another famous quotable major league manager, Casey Stengel, who said, “Never make predictions, especially about the future.”

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    This post was posted in Consulting, Research and was tagged with Construction industry trends, M&A Advisor Q2-2014

  • Have Oil & Gas Infrastructure Valuations Peaked?

    Posted on May 28, 2014 by FMI Corporation

    Looking up the Drilling RigWith more than 330 billion in capital expenditures to be conducted over the next four years in oil and gas construction markets, the energy infrastructure construction market will continue to boom. Many firms demonstrated record earnings performance in 2013, and for many firms 2014 is set to match if not exceed 2013 performance. With labor markets constricting and earnings improving, are oil and gas infrastructure firm valuations growing?

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    This post was posted in Consulting, Investment Banking, Research and was tagged with Scott Duncan, FMI Capital Advisors, Mergers & Acquisitions

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