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FMI Releases 2017 Ownership Transfer and Management Succession Study

RALEIGH, N.C. – September 21, 2017. FMI Corporation, the leading provider of management consulting and investment banking services to engineering and construction, infrastructure and the built environment, is pleased to announce the release of its 2017 Ownership Transfer and Management Succession report. The publication reveals new, emerging ownership trends and fresh insights on how companies are developing and preparing their future leaders.

Scott Duncan, director with FMI Capital Advisors, Inc., states, “Owners should have a strong understanding of the salability of their firms as they begin considering transition options. While a minority of construction firms will ultimately sell in the third-party marketplace, the issues that drive successful external transitions are often very like those that drive successful internal transitions.”

Some of the report’s key findings include:

  • Fewer firms have family members active in their businesses today than in 2013 (45% in 2017 versus 73% in 2013).
  • Fewer firms say that the next generation will both own and run the business in the future (32% in 2017 versus 52% in 2013).
  • ESOPs are resurging, increasing from 4% to 12% from 2013 to 2017, respectively.
  • Fewer firms are planning a third-party sale (decrease from 17% in 2013 to 8% in 2017).
  • 47% of identified successors won’t be ready for leadership roles for another three to five years.

Access the 2017 FMI OTMS report here.

About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

About FMI Capital Advisors

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving engineering and construction, infrastructure and the built environment. With over 600 completed transactions, our unique industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:
Scott Duncan, Director
Sduncan@fminet.com
713.936.4930

For more information, please visit www.fminet.com. Follow FMI on Twitter and LinkedIn.

Media Contact:
Rebecca Esler, FMI
919.785.9209
resler@fminet.com

FMI Advises Absolute Aeration on Sale to RevO2 Solutions

FMI Capital Advisors is pleased to announce the acquisition of Absolute Aeration by RevO2 Solutions. FMI Capital Advisors acted as the exclusive financial advisor to Absolute Aeration for this transaction.

Absolute Aeration is the Greeley, Colorado-based creator of the Blue FrogTM System wastewater treatment technology. The patented technology utilizes natural biological processes that enhance anaerobic sludge digestion, thereby eliminating mechanical dredging costs and improving the capacity and overall performance of wastewater storage systems. The Blue FrogTM System is an affordable and sustainable solution designed to meet wastewater treatment standards at a significantly lower life cycle cost. For more information, visit www.bluefrogsystem.com.

RevO2 Solutions is an innovative wastewater technology company. RevO2 has a long presence in the wastewater treatment industry and is committed to the continued growth of the Blue FrogTM System product lines. Through this transaction, the Blue FrogTM team will have a strong platform from which to serve its growing customer base and further penetrate its large addressable market.

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving companies in engineering and construction, infrastructure and the built environment. With over 650 completed transactions, our unique industry focus enables us to provide our clients with unparalleled insight and advice. Clients gain access to our extensive network of industry contacts and relationships, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:

Greg Powell – Managing Director
gpowell@fminet.com
919-785-9217

About FMI Corporation:

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

Media Contact:

Dave Harrell – Chief Marketing Officer
dharrell@fminet.com
919.785.9212

 

*Represented by FMI Capital Advisors, Inc.

FMI Releases Quarterly Publication, “Positioning to Win From the Inside Out”

FMI Corporation, the leading provider of management consulting and investment banking services to engineering and construction, infrastructure and the built environment, is pleased to announce the release of its third “FMI Quarterly” issue for 2017. The publication (co-sponsored by Zurich) comprises a collection of industry insights around organizational processes, structures and strategies that can help firms drive growth over time.

Chris Daum, FMI’s CEO, states, “We find ourselves in one of the longest sustained economic expansions in the history of the U.S. engineering and construction industry. As such, we think it is a good time to focus on a few strategic items that executives often overlook, but, if acted upon, can make a positive impact on a firm’s performance regardless of market conditions.”

In this Quarterly edition, authors discuss several topics, including, but not limited to:

  • How to proactively engage the company’s board of directors in the firm’s strategic plan.
  • Four steps to a winning divestment strategy.
  • A practical go-to-market strategy for making smarter and more disciplined choices about customer and project selection.
  • Cadre Coaching: An innovative approach to executive coaching that addresses not only individual behavior but also a shared set of organizational objectives in a team environment.
  • A model for structured incentive compensation plans that directly impacts a company’s bottom line.

To access the “FMI Quarterly,” please visit www.fmiquarterly.com.

About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

For more information, please visit www.fminet.com. Follow FMI on Twitter and LinkedIn.

Media Contact:
Rebecca Esler, FMI
919.785.9209
resler@fminet.com

FMI Advises Colorado Asphalt Services on Sale to West Edge Energy

FMI Capital Advisors, a subsidiary of FMI Corporation, is pleased to announce that West Edge Energy, LLC, (“West Edge”) has acquired Colorado Asphalt Services, Inc. (“CASI”). FMI Capital Advisors acted as the exclusive financial advisor to CASI.

CASI is a vertically integrated asphalt manufacturing and maintenance services business based in Denver, Colorado. For more than 30 years, the company has provided asphalt installation, paving and maintenance services to clients in the Denver metro and Front Range areas. For further information, visit CASI’s website at www.coloradoasphalt.com.

West Edge Energy is a Delaware limited liability company operating an integrated energy business with five primary business segments: refined petroleum products, crude oil, natural gas liquids (NGLs), natural gas and water. For further information, visit West Edge’s website at www.westedgeenergy.com.

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is the leading investment banking firm serving the Construction Materials industry. With over 100 completed transactions in Construction Materials, our industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise, based on decades of experience.

FMI Capital Advisors Contact:

Scott Duncan, Managing Director
sduncan@fminet.com
713.936.4930

About FMI Corporation:

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

 

 

*Represented by FMI Capital Advisors

FMI Advises Drexel Metals in Sale to Carlisle Construction Materials

FMI Capital Advisors is pleased to announce the sale of Drexel Metals, Inc., a portfolio company of Arborview Capital, to Carlisle Construction Materials (“CCM”), a $2 billion division of Carlisle Companies (NYSE: CSL). Drexel Metals is a leader in the architectural metal roofing segment serving both residential and commercial customers with annual revenue of approximately $50 million. FMI Capital Advisors acted as the exclusive financial advisor to Arborview Capital and Drexel Metals.

The transaction was led by Porter Wiley, Managing Director and head of FMI’s Building Products Group. FMI’s independent research team supported the transaction with a “staple” diligence package which included a custom market forecast and competitive analysis report.

“Porter and the FMI team did an outstanding job of preparing us to best articulate the strengths of the Company’s innovative business model”, said Karl Khoury, Arborview Partner and Drexel Chairman. “In addition, their knowledge of and relationships within the building products industry enabled them to introduce multiple interested parties to the process that we would not have thought to contact ourselves.” Arborview Capital, headquartered in Chevy Chase, Maryland, is a growth equity and venture capital firm that makes investments in impact-focused companies across the energy efficiency, resource efficiency and sustainability sectors.

Drexel is a market leader in the move to on-site fabrication of roofing panels using mobile roll-forming machines. The company also provides custom trim and cornice fabrication, edge metal, underlayment and insulation products. “We are now excited about being part of the CCM family of products,” said Brian Partyka, President of Drexel Metals.

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving engineering and construction, infrastructure and the built environment. With over 600 completed transactions, our unique industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:

Porter Wiley
Manager Director
pwiley@fminet.com
919-785-9210

Retro-Tech Systems Merges with LRI Energy Solutions

Raleigh, NC – FMI Capital Advisors Inc., a subsidiary of FMI Corporation, is pleased to announce the merger of Retro-Tech Systems (“RTS”) with LRI Energy Solutions (“LRI”) under a new holding company Integrated Efficiency Solutions (“IES”), a portfolio company of  DFW Capital Partners (“DFW”).  FMI Capital Advisors acted as the exclusive financial advisor to RTS for this transaction.

RTS, which includes RTS Lighting, RTS Water, RTS Utility Metering, and RTS Building Envelope, joins LRI, also a wholly owned subsidiary. LRI includes wholly owned subsidiary Lighting Retrofit International, Water Savers, and recently acquired Enlight Energy Efficient Lighting.

With the acquisition of RTS, IES has firmly established a national market customer and service footprint.  Both RTS and LRI enjoy established reputations as leaders in cost-effective, advanced, creative solutions for energy, water, building envelope, and metering-focused on energy service companies (“ESCOs”) supporting the Federal government, MUSH (municipalities, university, schools, and hospitals), and utility providers.  Both companies’ customers rely on the similar core competencies of design, engineering, project management,analysis, and market knowledge.

About FMI Corporation:

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

FMI Releases Quarterly Publication

Texas: Lessons From the Lone Star State

RALEIGH, N.C. – June 8, 2017. FMI Corporation, the leading provider of management consulting and investment banking services to engineering and construction, infrastructure and the built environment, is pleased to announce the release of its second “FMI Quarterly” issue for 2017. The publication (co-sponsored by Zurich) comprises a collection of industry insights and lessons learned from Texas that can be applied to the broader engineering and construction industry—regardless of geographic location.

Chris Daum, FMI’s CEO, states, “Texas is driven by a pro-business attitude and entrepreneurial spirit that translate into every aspect of the engineering and construction industry. Even if your plans don’t call for relocating or doing business in the state of Texas, there are things you can learn by studying this state’s market.”

In this Quarterly edition, authors describe Texas’ business climate and reasons for success, share important lessons learned, and explore some of the key reasons why this state has maintained its prominence in the business market for decades. Example topics include: how to develop a diverse work culture; key contractor acquisition trends; strategic implications while operating across a sizable geography such as Texas; and practical compensation strategies for navigating a cyclical market. Authors also share insights around effective workforce development initiatives that are currently being implemented in the Houston market.

To access the “FMI Quarterly,” please visit www.fmiquarterly.com.

About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

For more information, please visit www.fminet.com. Follow FMI on Twitter and LinkedIn.

Media Contact:

Rebecca Esler, FMI
919.785.9209
resler@fminet.com

FMI Forms Houston-based Energy Service & Equipment Investment Banking Team

FMI enhances its financial advisory services within the Energy Industry, including the energy service & equipment sectors, through the hiring of Barry Donovan and Michael Chevalier-White as managing directors and Alex Woo as vice president.  The Houston-based team’s activities involve participants in the services and products sectors of the upstream, midstream and downstream oil & gas and other energy and process-related industries.  Barry, Michael and Alex have advised on 160+ closed M&A and equity/debt transactions totaling $30 billion in value.

Prior to joining FMI, Barry and Michael were managing directors in the energy investment banking groups of Raymond James / Morgan Keegan, providing merger, acquisition, private placement and public offering advisory services to the energy service & equipment industry.  Barry and Michael were the founders and managing directors of Paragon Advising, an investment bank acquired by Morgan Keegan, which served the energy and other process industries.  Before forming Paragon, Barry was director of corporate finance and client services of Simmons & Company, an investment bank focused on the oil & gas industry, and Michael was a senior manager at Ernst & Young.  Prior to joining FMI, Alex worked for Lazard Frères, a global M&A advisory bank, where he worked on a variety of M&A and advisory transactions, including private placements, buy and sellside engagements and activist defense. In addition to investment banking experience, Alex worked for ENSCO International, the largest global provider of offshore jack-up drilling rigs, in its management training program.

Chris Daum, FMI CEO, states, “With approximately 70 years of combined financial advisory / energy experience, Barry, Michael and Alex bring extensive knowledge and expertise in serving oil & gas service and equipment companies and investors, allowing them to provide customized solutions and exceptional results to clients.”

Barry Donovan, FMI managing director, states, “Michael, Alex and I look forward to working closely with our new FMI colleagues to strengthen our respective relationships and enhance our services offering within the upstream, midstream and downstream oil & gas and other energy and process-related industries.”

FMI Capital Advisors- Houston Contacts:

Barry Donovan
Managing Director
bdonovan@fminet.com
713-936-4982

Michael Chevalier-White
Managing Director
mchevalierwhite@fminet.com
713-936-4966

Alex Woo
Vice President
awoo@fminet.com
713-936-4960

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving engineering and construction, infrastructure and the built environment, including Oil and Gas. With over 600 completed transactions, our unique industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise.

About FMI Corporation:

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

Analysis: What Vulcan’s purchase of Aggregates USA means

Vulcan Materials Co.‘s acquisition of Aggregates USA LLC represents the largest construction materials-related deal of the year – by far.

The $900 million acquisition will reportedly add 31 facilities across five Southeastern states to Vulcan’s ever-growing portfolio. But according to George Reddin, the managing director at FMI Capital Advisors Inc., the Aggregates USA deal should not necessarily come as a surprise to the aggregate industry.

“It is interesting news but not necessarily surprising,” says Reddin, who specializes in mergers and acquisitions for the construction materials industry. “The market sentiment is that Aggregates USA had been floating the idea out there for quite some time that they would like to sell. They’re Birmingham, (Alabama)-based, as well, so they fit Vulcan very well. And, at its size, there were only so many people who could acquire it.”

Aggregates USA, which formed in 2010, was the aggregate business of SPO Partners, a Mill Valley, California-based investment firm that employs a long-term, value-oriented and concentrated approach to investing in companies in the public and private markets. SPO Partners purchased Aggregates USA years ago during the market’s downturn, Reddin says, so the timing was likely right for the firm to move Aggregates USA.

“The goal for most private equity buyers is to exit their investment and provide a return to their LPs in three to five years – seven at the outside,” Reddin says. “So this particular deal was due. When you look at who the owner was, it’s an owner who doesn’t want to own such an asset forever. That’s the nature of the beast.”

A deal like this one also reflects how far top aggregate producers have come with their balance sheets since the economic downturn, Reddin says.

“The publicly traded companies expanded into the crash of 2008 with significant acquisitions often financed with debt,” he says. “Post crash many of the publicly traded companies found themselves overleveraged and out of the M&A market. Over the last eight-plus years these companies have worked diligently to reduce their leverage ratios and now find themselves back in the game.”

While the Aggregates USA acquisition strengthens Vulcan in the Southeast, Vulcan was active on the mergers-and-acquisitions front this year ahead of this latest deal.

Vulcan acquired the asphalt division, construction division and Monterey Sand business from Tennessee-based LoJac Holdings Corp. near the start of 2017. Additionally, they acquired Shamrock Materials earlier this year, providing Vulcan with concrete, rock, and sand and gravel assets in California.

These transactions reflect Vulcan’s interests in growth via acquisition and in diversifying, according to Reddin.

“These deals shows Vulcan’s interest in different types of businesses,” he says. “These recent deals show that they are embracing geographic diversification, and a willingness to vertically integrate where appropriate.”


This article was originally published May 26, 2017 on Pit & Quarry.

FMI Advises Graymont Materials Inc. On Sale of Assets to Upstone Materials Inc.

Raleigh, NC-

FMI Advises Graymont Materials (NY) Inc. On Sale of Assets to Upstone Materials Inc. (a Colas USA company)

FMI Capital Advisors, a subsidiary of FMI Corporation, is pleased to announce that Upstone Materials Inc. (a Colas USA company) (“Upstone”) has acquired the assets of Graymont Materials (NY) Inc. (“Graymont”). FMI Capital Advisors acted as the exclusive financial advisor to Graymont.

Graymont’s New York Materials operations are focused on providing construction stone, sand and gravel, asphalt products and ready-mix concrete to meet infrastructure and general construction needs in the region. Graymont is an emerging global leader in the supply of lime and limestone products. It serves major markets throughout the United States and Canada, and has extended its reach into the Asia-Pacific region. Graymont also has a significant investment in Grupo Calidra, the largest lime producer in Mexico.

Upstone is a member of the Barrett Industries Group, which is comprised of a number of subsidiary companies that provide diverse solutions to customers in the paving, aggregates and construction businesses. Barrett Industries is a subsidiary of Colas USA, a leader in transportation infrastructure construction and maintenance

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is the leading investment banking firm serving the Construction Materials industry. With over 100 completed transactions in Construction Materials, our industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise, based on decades of experience.

FMI Capital Advisors Contact:

George Reddin, Managing Director
Greddin@fminet.com
919-785-9286

Marvin Roeder, IB Associate
Mroeder@fminet.com
919-785-9350

About FMI Corporation:

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

FMI Advises E.J. Breneman On Sale of Select Assets to Shallenberger Construction, Inc.

Raleigh, NC-

FMI Capital Advisors, a subsidiary of FMI Corporation, is pleased to announce that Shallenberger Construction, Inc. (“Shallenberger”) has acquired select assets of E.J. Breneman, LP (“E.J. Breneman”). FMI Capital Advisors acted as the exclusive financial advisor to E.J. Breneman.

Shallenberger is a privately held, general contractor and project management company headquartered in Connellsville, Pennsylvania. Shallenberger’s services include general site preparation for private and commercial land development and for the gas and oil industry in regards to construction of well site pads, access roads and holding ponds.

E.J. Breneman is an alternative technology road contractor headquartered in West Lawn, Pennsylvania. E.J. Breneman serves the mid-Atlantic with services including full depth reclamation, soil stabilization, and energy field infrastructure.

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is the leading investment banking firm serving the Construction Materials industry. With over 100 completed transactions in Construction Materials, our industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise, based on decades of experience.

FMI Capital Advisors Contact:

George Reddin, Managing Director
Greddin@fminet.com
919-785-9286

Marvin Roeder, IB Associate
Mroeder@fminet.com
919-785-9350

About FMI Corporation:

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

FMI Corporation Acquires Empower Partners LLC

April 25, 2017

FMI Corporation is pleased to announce the acquisition of Empower Partners LLC.

FMI Corporation, the leading provider of management consulting and investment banking services to engineering and construction, infrastructure and the built environment, is pleased to announce the acquisition of Empower Partners LLC.

Chris Daum, FMI CEO, states, “Empower Partners brings tremendous leadership, a passion to serve the Building Products industry and an extensive industry relationship network to FMI. Since 1982, Empower founder Steve Hillis has been serving the industry in several leadership roles as a product innovator and business leader. They are universally held as top experts in Building Products by their clients and industry partners. We are excited to have them join FMI.”

Steve Hillis, founder of Empower Partners LLC, states, “I am honored to join the FMI team and it is exciting to be associated with such a professional and experienced team of consultants, researchers and investment bankers.  FMI has a rich heritage of providing management consulting and investment banking services to the construction industry and our partnership will serve to build on our existing Building Products services.  Delivering client-focused solutions will be our top priority.”

About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of industry context, connections and leading insights result in transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results. Learn more at www.fminet.com.

About Empower Partners LLC

Headquartered in Canton, Ga, just outside of Atlanta, Empower Partners LLC helps companies in the Building Products sector improve market position and financial outcomes.  They are experts in developing sales leaders, sales people and operational discipline to deliver industry-leading results.

FMI Advises BCH Mechanical on Sale to Comfort Systems U.S.A.

Raleigh, NC-

FMI Capital Advisors Inc., a subsidiary of FMI Corporation, is pleased to announce BCH Mechanical, Inc. has been acquired by Comfort Systems U.S.A.  FMI Capital Advisors acted as the exclusive financial advisor to BCH Mechanical, Inc. for this transaction.

BCH is a regional mechanical contractor based in Tampa, Florida. BCH engages in a broad range of mechanical contracting projects and services in Central Florida, and conducts service operations in 10 states throughout the southeast.  BCH‘s capabilities include HVAC, plumbing, medical gas, piping, sheet metal, LEED, Design/Build, 3D-CAD/BIM coordination, and HVAC service. Their commercial construction expertise extends to specialized projects, such as research labs, industrial and manufacturing facilities, as well as education, government, and health care structures.

Comfort Systems is a leading provider of commercial, industrial and institutional heating, ventilation and air conditioning (“HVAC”) services.  Headquartered in Houston, TX, our subsidiary companies all across the country can build, service or retrofit systems for virtually any building – from schools and museums to high-rise office buildings and hospitals – even industrial plants that manufacture everything from potato chips to computer chips.

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving engineering and construction, infrastructure and the built environment. With over 600 completed transactions, our unique industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:

Randy Stutzman, Managing Director
rstutzman@fminet.com
813-636-1247

About FMI Corporation:

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

FMI Advises Mechanical, Inc on acquiring Pitlor Mechanical Corporation

Raleigh, NC-

FMI Capital Advisors Inc., a subsidiary of FMI Corporation, is pleased to announce Mechanical, Inc. has acquired Pitlor Mechanical Corporation.  FMI Capital Advisors acted as the exclusive financial advisor to Mechanical, Inc.

Pitlor Mechanical Corporation is a full-service mechanical contractor located in Omaha, NE. A successful business for over one-hundred years, the company has emerged to be a leading mechanical contractor serving the Omaha metro area.

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving engineering and construction, infrastructure and the built environment. With over 600 completed transactions, our unique industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:

Ryan Foley, Director
RFoley@fminet.com
303-398-7202

Landon Funsten, Sr. Managing Director
LFunsten@fminet.com
919-785-9284

About FMI Corporation:

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

FMI Advises CCI Mechanical on Sale to EMCOR Group, Inc.

FMI Capital Advisors Inc., a subsidiary of FMI Corporation, is pleased to announce CCI Mechanical (operating subsidiary of Redwood Industries, Inc.) has been acquired by a subsidiary of EMCOR Group, Inc.  FMI Capital Advisors acted as the exclusive financial advisor to CCI Mechanical.

CCI Mechanical, which was founded more than 50 years ago, provides mechanical contracting and services for commercial, industrial, and data center clients throughout Utah. CCI Mechanical becomes part of EMCOR Mechanical Services, EMCOR’s U.S. Building Services operations.

EMCOR Group, Inc. (NYSE: EME), is a Fortune 500 leader in mechanical and electrical construction, industrial and energy infrastructure, and building services for a diverse range of businesses.

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving engineering and construction, infrastructure and the built environment. With over 600 completed transactions, our unique industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:

Ryan Foley, Director
RFoley@fminet.com
303-398-7202

About FMI Corporation:

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

FMI Forecasts Steady Growth in Construction for 2017

Raleigh, NC -May 2, 2016 – FMI’s forecast for 2017 predicts an increase of 6% for total construction put in place. With GDP most recently reporting 2.1 percent growth in the fourth quarter of 2016, construction growth of 6% looks solid. Although this is a drop from the hot pace of growth from 2013 through 2015, it seems to indicate that the recovery bounce is over and more normal growth is in store for the next few years.

The Index score for the second quarter NRCI slipped 1.1 points to 61.4 but maintains a level of optimism for construction in 2017. The backlog index indicates a median of 12 months, unchanged for the last three quarters, and the cost of labor index is still indicating higher costs. When labor and materials costs rise, the overall NRCI index decreases somewhat. Nonetheless, as we have noted before, rising costs of labor and materials indicate that the economy is supporting these increases. Other economic components gained or lost within a point of last quarter’s results. The areas to watch, however, are the market indexes. As in our Outlook forecast, panelists expect manufacturing construction to have solid growth for the next three months to three years. Other markets are still registering solidly positive numbers, but lodging, office and commercial construction indicate that NRCI panelists expect a sharp downturn in those markets next year, particularly for commercial and lodging construction.

Forecasts for some key sectors:

Manufacturing—Manufacturing construction growth has been subject to some sharp ups and downs in the last decade, but we expect growth to improve to 4% in 2017 to reach near $78.2 billion and increase to 7% in 2018. Currently, at just 75.4 for February 2017, manufacturing capacity utilization slipped 0.6% over the previous month and was just 0.2 percent lower than the same time last year. Increasing energy prices may spur some capacity additions in the oil and gas sector, but price increases haven’t been that stable at this point. The completion of the Panama Canal expansion project is expected to decrease costs and increase shipments from Gulf Coast ports between the U.S. and Asia.

Lodging—At just 10% for 2017, lodging construction is expected to have its slowest year of growth since 2012 when it made a roaring comeback from negative 22% to a 19% improvement. New supply of rooms is beginning to surpass absorption rates, thus putting downward pressure on revenue per room and occupancy rates. The industry is also facing some new competition in the market with the rise of startups like Airbnb. Nonetheless, the hotel industry is showing solid performance as revenue per available room (RevPAR) continues a long streak of improvement. Renovation of key properties will continue to be active so that established properties can continue to attract quests looking for new services and amenities.

Highway and Street—Highway and street construction increased just 1% in 2016 to $91.0 billion. FMI forecasts 3% growth for 2017 and another 4% in 2018. The Fixing America’s Surface Transportation (FAST) Act for highway and transportation funding removed some uncertainty for highway funding; however, we do not expect a significant jump in spending over current levels. Although much political discussion is being generated around infrastructure with highways, streets and bridges being high on the list, no real plans are in place at the federal budget level.

Read the full report.

About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure, and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor. More than six decades of industry context, connections, and leading insights leads to transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

Sector Expertise

  • A/E and Environmental
  • General Contractors/CM
  • Heavy Civil
  • Industrial
  • Specialty Trades
  • Utility T&D
  • Clean Tech and Energy Services
  • Construction Materials
  • Building Products
  • Oil and Gas
  • Private Equity
  • Owners

For more information, please visit https://www.fminet.com.  Follow FMI on Twitter and LinkedIn.

Media Contacts

Rebecca Esler
FMI
(919) 785-9209
REsler@fminet.com

FMI Advises Berks Products and EJB Acquisitions By New Enterprise

FMI Capital Advisors, a subsidiary of FMI Corporation, is pleased to announce that New Enterprise Stone & Lime Co., Inc. (“New Enterprise”) has acquired the assets of EJB Paving & Materials Company (“EJB”) and select assets of Berks Products Corporation (“Berks Products”). FMI Capital Advisors acted as the exclusive financial advisor to Berks Products and EJB for these transactions.

New Enterprise is a privately held, vertically integrated construction materials supplier and heavy/highway construction contractor in Pennsylvania and western New York and a national traffic safety services and equipment provider.

EJB is a road construction and blacktop supply company located in the heart of Berks County, Pennsylvania. Located just south of Leesport, Pennsylvania, EJB’s two hot mix asphalt plants service Berks and surrounding counties.

Berks Products is a leading supplier of aggregates, ready mix concrete, and construction materials in Southeastern Pennsylvania. Markets served include Berks County, the Lehigh Valley and all surrounding areas. As part of the transaction, New Enterprise acquired Berks Products’ two aggregates quarries, four ready mix concrete plants, and construction supply facility.

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving companies in Engineering and Construction, Infrastructure and the Built Environment. With over 600 completed transactions, our unique industry focus enables us to provide our clients with unparalleled insight and advice. Clients gain access to our extensive network of industry contacts and relationships, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:

George H. Reddin – Managing Director
greddin@fminet.com
919-785-9286

Media Contact:

Dave Harrell – Chief Marketing Officer
dharrell@fminet.com
919.785.9212

FMI Nonresidential Construction Index (NRCI) Reverses Course, Gains 5.6 Points in the First Quarter 2017

March 2nd, 2017

The FMI NRCI gained 5.6 points in the first quarter with almost every component of the NRCI Index moving in the positive direction. This result for the beginning of 2017 is welcome, as many have been expecting a slower economy. That expectation seemed to be only based on the idea that it has been good for so long, it must go down. The fact that material and labor costs continue to rise is a positive sign of a growing economy. It appears we can sustain the growth cycle for some time longer, and that may be in part because it has been slow growth, not a meteoric burn and decay. Slow growth or not, panelists indicate that finding enough talented people to do the work and somehow improve productivity are among their chief concerns again this year. Finding qualified superintendents and project managers are among the toughest challenges for 2017. Nearly half of the NRCI panelists indicated they need to replace most critical positions in their companies within the next five years, only 35% currently have management succession plans in place.

Current Issues Summary

  • Hiring Plans: Hiring plans for NRCI panelist companies are on par or a bit higher than last year, with 53% expecting a 0% to 5% increase in full-time direct employees.
  • Top Challenges for 2017: The top challenge continues to be hiring top people followed by increasing productivity. Finding profitable work is expected to be a greater challenge than in 2016.
  • Expected Growth for 2017: Panelists’ outlook for growth is modest for 2017, but slightly higher than for 2016 at around 2.5% to 5% with 11% responding expecting over 5% growth.
  •  Lean Construction and IPD Trends: Panelists’ response to several questions about trends in the use of Lean Construction, Integrated Project Delivery (IPD) and the application of both on a project. The majority who answered the questions are applying lean construction practice on nearly half of their projects. The use of IPD is somewhat lower, and the use of both practices together on a project is still a small percentage for most companies but shows signs of growth. Most expect it will be three years or more before these practices see widespread use.
  • Ownership Transfer and Management Succession Plans: Forty-one percent of panelists said they will need successors to replace most critical positions within the next 5 to 10 years. Only 24% have ownership transfer plans in place. The top ownership transfer plan by far is “sell to employees.”

NRCI First Quarter 2017 Highlights

  • Overall Economy: The NRCI Index component for the overall economy jumped 15.4 points to a strong showing of 73.8, reflecting improvements in GDP, the recent stock market rally and expectations of business-friendly policy changes.
  • Overall Economy Where Respondents Do Business: NRCI panelists were slightly less confident about the business outlook in their local markets compared with the overall economy, but still registered a positive 11.8-point jump to 72.0 for this component of the NRCI Index.
  • Respondents’ Construction Business: Panelists’ outlook for their own business improved 8.7 points to a solid 75.3. This is a continuation of a strong business outlook in 2016.
  • Nonresidential Building Construction Market Where Respondents Do Business: Registering an increase over the fourth quarter of 9.1 points to 73.7, panelists are not seeing what was an expected slowdown last quarter.
  • Expected Change in Backlog: Backlogs continue to be reported at a median of 12 months, and most panelists expect this to continue or improve in the coming months.
  • Cost of Construction Materials and Labor: With a strong outlook, it is not surprising to see increases in the costs of inputs like construction materials and labor.
  • Productivity: The component in index for productivity made a positive move to get out of negative territory, but only up to 50.0 points. Increasing productivity is one of the top challenges for construction in 2017.

Download the full report here.

About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure, and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor. More than six decades of industry context, connections, and leading insights leads to transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

Sector Expertise

  • A/E and Environmental
  • General Contractors/CM
  • Heavy Civil
  • Industrial
  • Specialty Trades
  • Utility T&D
  • Clean Tech and Energy Services
  • Construction Materials
  • Building Products
  • Oil and Gas
  • Private Equity
  • Owners

2017 FMI/BIMForum Prefabrication Study Reveals Changing Environment

February 9th, 2017

Raleigh, N.C.  FMI Corporation, the leading provider of management consulting and investment banking services to engineering and construction, infrastructure and the built environment, is pleased to announce the release of the “2017 FMI/BIMForum Prefabrication Survey.” The publication offers insights into key trends and drivers shaping today’s prefabrication environment in construction.

Study findings are based on almost 200 participants—a mix of both specialty trade contractors and GCs/CMs—most of whom work in the commercial sector. The companies that participated in this study collectively generate approximately $38 billion in industry revenue each year.

Key highlights of the report include:

  • The majority (77%) of respondents think today’s prefabrication environment is different than in 2013 when we last surveyed the industry.
  • The amount of project work using prefab has almost tripled between 2010 and 2016.
  • Almost 90% of respondents perceive their prefabrication process as ineffective or in need of improvement.
  • Contractors want to double their labor investments in prefabrication over the next five years.
  • Many survey participants achieve minimal savings in total annual labor hours related to prefabrication efforts.

For the full analysis of the survey’s results, click here.

About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections, and insights leads to transformational outcomes for our clients and the industry.

For more information, please visit http://hale.sg-host.com. Follow FMI on Twitter and LinkedIn.

Media Contact:

Rebecca Esler, FMI
919.785.9209
resler@fminet.com

FMI Advises Enovity on Sale to Veolia

January 30th, 2017

RALEIGH, N.C. FMI Capital Advisors Inc., a subsidiary of FMI Corporation, is pleased to announce the sale of Enovity, a San Francisco-based energy services firm, to Veolia North America. FMI Capital Advisors acted as the exclusive financial advisor to Enovity for this transaction.

Enovity is a strategic acquisition that complements Veolia’s existing SourceOne energy services business. Investing in Enovity supports Veolia’s growth strategy within the energy services sector in North America. With the Enovity acquisition, Veolia’s energy solutions business expands to 250 professionals with offices in New York, Boston, Philadelphia, and four locations in California (San Francisco, Los Angeles, Irvine and Sacramento), combining the leading minds in the energy services business.

Veolia group is the global leader in optimized resource management. With over 174,000 employees worldwide, the Group designs and provides water, waste and energy management solutions that contribute to the sustainable development of communities and industries. Through its three complementary business activities, Veolia helps to develop access to resources, preserve available resources, and to replenish them. In 2015, the Veolia group supplied 100 million people with drinking water and 63 million people with wastewater service, produced 63 million megawatt hours of energy and converted 42.9 million metric tons of waste into new materials and energy. Veolia Environnement recorded consolidated revenue of €25 billion ($27.2 billion) in 2015. www.veolia.com

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving engineering and construction, infrastructure and the built environment. With over 600 completed transactions, our unique industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:

Tim Huckaby, President
thuckaby@fminet.com
303-398-7265

About FMI Corporation:

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections and insights lead to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

Media Contact:
Rebecca Esler
FMI Corporation
919-785-9209
resler@fminet.com.

FMI Releases 2017 U.S. Markets Construction Overview

January 30th, 2017

RALEIGH, N.C. FMI Corporation, the leading provider of management consulting and investment banking services to engineering and construction, infrastructure and the built environment, is pleased to announce the release of its “2017 U.S. Markets Construction Overview.” The publication offers comprehensive construction forecasts for a broad range of market segments and geographies and provides valuable insights from FMI executives on how to navigate the next 12 months.

Download the 2017 U.S. Markets Construction Overview

Key highlights of the report include:

  • The outlook for construction growth in 2017 continues to be positive for all market sectors.
  • FMI expects a 1% increase in construction-put-in-place growth throughout the year (compared to the 5% increase in 2016)
  • The total NRCI Index Score fell from 57.3 (third quarter 2016) to 56.9 in the fourth quarter of 2016. While the trend indicates a slower outlook for nonresidential construction, the Index is still solidly in positive territory, as it has been since the first quarter of 2012.
  • FMI’s key advice for 2017 is: “Plan for contingencies; execute based on the facts.”

Chris Daum, FMI’s CEO, states, “Looking ahead in 2017, there is cause for continued optimism for the North American E&C industry. However, beyond a sound economy and other traditional demand drivers, there is growing hype for a boom market in infrastructure spending, which to date is nothing more than speculation based on the new presidential administration. Our caution to clients is similar to the old Wall Street bromide, “buy the rumor and sell the news.” Only in this case, we should all prepare for the possibility, but invest behind the facts.”

About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the industry as a trusted advisor. More than six decades of industry context, connections and insights lead to in transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

For more information, please visit http://hale.sg-host.com.

Follow FMI on Twitter and LinkedIn.

To view this video on YouTube, please visit: https://youtu.be/K_8FfeYjTNc

Media Contact:
Rebecca Esler
FMI Corporation
919-785-9209
resler@fminet.com

FMI Releases 2016 Compensation Study

Raleigh, N.C. FMI Corporation, the leading provider of management consulting and investment banking services to the engineering and construction, infrastructure and the built environment, is pleased to announce the release of its latest study, “Compensation Planning for Engineering and Construction Firms – 2016 Industry Survey.”

The publication identifies key industry trends related to incentive compensation plans, compares incentive practices provided by companies today with those reported by companies in 2013, highlights prevalent practices aimed at employee attraction and retention, and provides action plans on how to address several compensation-related challenges.

Some of the main study findings include:

  • Almost 60% of respondents do not tie their compensation plans to corporate strategies.
  • Almost 30% of respondents are spending less than 5% of their operating incomes on incentive compensation.
  • The shift toward incentive compensation plans continues, yet more than 50% of respondents still find their compensation plans either ineffective or just moderately effective.
  • Almost 75% of survey respondents offer discretionary incentives, which appear to be distinctly less effective compared to structured incentives.
  • Long-term compensation plans are viewed as an effective way to retain executives or high-potential employees.

To access the report, click here.


About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor. More than six decades of industry context, connections and leading insights result in transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results. For more information, please visit http://hale.sg-host.com. Follow FMI on Twitter and LinkedIn.


Media Contact:

Rebecca Esler, FMI Corporation
919.785.9209
resler@fminet.com

FMI Releases Quarterly Publication Innovation and Transformation: Paving the Way to Tomorrow

Raleigh, N.C. – December 8, 2016. FMI Corporation, the leading provider of management consulting and investment banking services to the engineering and construction, infrastructure and the built environment, is pleased to announce the release of its fourth “FMI Quarterly” issue for 2016. The publication (co-sponsored by Zurich) comprises a collection of industry insights and strategies focused on innovation and transformation in today’s engineering and construction industry.

Chris Daum, FMI’s CEO, states, “Advances in technology and innovation in the engineering and construction industry have been historically slow to catch on. Today, that is no longer the case. From innovative construction materials to new processes and emerging technology platforms, every corner of the industry is feeling the impacts and pressures of these developments.”

In this edition of the “Quarterly,” we present unique insights from successful industry leaders (DPR Construction, Thornton Tomasetti and the APi Group) on the different ways in which they have led innovations and positive disruptions. This issue also provides a snapshot of our latest prefabrication industry study and explores the impact of technological influences on today’s E&C labor practices.

Finally, authors also discuss emerging trends in the burgeoning markets for smart homes and smart buildings as well as changing business models for construction management firms.


About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor. More than six decades of industry context, connections and leading insights result in transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

For more information, please visit http://hale.sg-host.com. Follow FMI on Twitter and LinkedIn.


Media Contact:
Rebecca Esler, FMI
919.785.9209
resler@fminet.com

FMI Nonresidential Construction Index (NRCI) Down in the Fourth Quarter 2016: Expectations for a Slowing Economy

The FMI Nonresidential Construction Index slipped just 0.4 points in the fourth quarter to 56.9. In the fourth quarter of 2015, the Index stood at 59.5. While the trend indicates a slower outlook for nonresidential construction, the Index is still solidly in positive territory as it has been since the first quarter of 2012. While most of the economic components of the NRCI slipped lower this quarter, backlogs increased from 10 months to 12 months with expectations that backlog growth will continue in the near term. Looking at markets, the outlook continues to be positive for all markets through the next year, but the three-year outlook is less rosy.

 

Current Issues Summary

  • Private sector investment activity was by far the most important positive issue for the business outlook in 2017.
  • Trends affecting specific market sectors that panelists work in came in second for potential positive trends.
  • The results of the presidential and congressional elections came in third place for the top ranking of No. 1; however, consumer sentiment and spending decisions made a strong showing for No. 2 and No. 3 rankings in importance.
  • For the top-ranked potential negative outcomes, the results of the presidential and congressional elections came in first place. The question wasn’t specific to one political party or another.
  • The second-ranked concern was unemployment rates. Low unemployment rates have made it more difficult to hire needed workers as well as kept wages higher.
  • U.S. monetary policy and interest rates ranked third in negative concerns. The expectation is that the Federal Reserve will increase interest rates in 2017.

 

NRCI Fourth Quarter 2016 Highlights

  • Overall Economy: At 58.5, a gain of just 0.4 points, panelists’ view of the overall economy was little changed over last quarter.
  • Overall Economy Where Respondents Do Business: With a drop of just 0.2 points, the NRCI component results for the overall economy where panelists do business is essentially unchanged.
  • Respondents’ Construction Business: With a score of 66.7, panelists still view their business as strong, but this is a drop of 4.3 points from the third quarter.
  • Nonresidential Building Construction Market Where Respondents Do Business: The fourth quarter results continue to show that construction executives participating in the NRCI believe their construction markets are somewhat stronger than that of the overall economy; however, the score of 64.6 this quarter was a drop of 2.7 points over last quarter.
  • Expected Change in Backlog: The median current backlog in months went from 10 months last quarter to 12 months for the fourth quarter. The score for expected change in backlog increased from 58.9 to 61.3 this quarter. While this growth trend seems to run counter to other components, it appears to represent continued momentum from the growth of the past year that should last well into 2017.
  • Cost of Construction Materials and Labor: The NRCI components for the cost of materials and labor improved somewhat this quarter; however, both continue to indicate rising costs for construction companies.
  • Productivity: Even though our component score for productivity improved 1.6 points this quarter to 48.1, the outlook for improving productivity continues to struggle. Along with growing backlogs, this appears to indicate that finding enough skilled labor continues to be a huge challenge.

Download Full Report Here


Media Contacts

Rebecca Esler
FMI Corporation
(919) 785-9209
Resler@fminet.com

FMI Releases Q3 2016 Construction Outlook

FMI Forecasts Steady Growth in Construction

Raleigh, NC October 19, 2016 – FMI’s forecast for the third quarter shows somewhat slower growth for some sectors, but, for most sectors, continues our forecast for the first two quarters of the year. So what do we see now for future growth? Continued slow growth doesn’t mean no growth. The billions of dollars in construction growth tend to add up. Even though there are no signs that GDP will break out of its upish slump, the economy is still adding jobs, buying homes and spending money on consumer and durable goods, but not as much as before the recession, or enough to boost the Consumer Price Index. It is surprising that there are few, if any, signs of inflation in a growing economy. The Federal Reserve has achieved most of its goals, but can’t seem to find a good time to raise interest rates even a little bit. No one wants to be responsible for pulling the plug on a thriving economy.

The largest growth markets are lodging (14%), office (11%), commercial (8%) and educational construction (6%). With the exception of commercial construction, all are strong markets but growing slower than in 2015. Together, these four markets represent 52.1% of CPIP for 2016. Growth expectations in these markets were supported by FMI’s Second Quarter Nonresidential Construction Index report. Construction executives answering the NRCI survey increased their optimism to drive the total NRCI Index score from 55.6 in the first quarter to 61.3 in the second quarter.

Forecasts for some key sectors:

Manufacturing—Manufacturing construction took a heavy hit during the Great Recession, but it has more than caught up as of 2015 with a whopping growth of 33% for the year and a more modest 2% growth expected for 2016. Continued low energy prices will hold down capacity additions in the oil and gas sector, but help those relocating or expanding in other areas of manufacturing, including the current boom in the petrochemical areas.

Commercial—The solid growth rate of 6% for commercial construction in 2015 will continue through 2016 before dropping to 4% and lower through 2020. Some of the fastest-growing areas in commercial retail construction have been drinking places and food services; however, building materials and garden supply stores are currently experiencing the highest growth rate. While many national chain stores continue to close properties and downsize new stores, new startup businesses are taking off in major metro areas. Disruption in traditional commercial construction is occurring not only for online shopping but also in the form of boutique startups and the future of smart stores both online and stick-built. Growth in non-store sales is also driving growth in warehouse space and data centers.

Health Care—Health care construction is making a steady recovery. FMI is forecasting $41.0 billion in construction put in place for 2016 and 5% growth in 2017. Traditional large hospital projects are returning to the drawing boards with fewer large hospital projects in the works. The bulk of the work will be renovation and additions as well as outpatient care. New facility designs are upping the game for a patient-centered environment as well as reducing concerns for the spread of supergerms. Construction will continue to become more collaborative and integrated with the various communities involved.

Download the full report here.


About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure, and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor. More than six decades of industry context, connections, and leading insights leads to transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

Sector Expertise

  • A/E and Environmental
  • General Contractors/CM
  • Heavy Civil
  • Industrial
  • Specialty Trades
  • Utility T&D
  • Clean Tech and Energy Services
  • Construction Materials
  • Building Products
  • Oil and Gas
  • Private Equity
  • Owners

For more information, please visit http://hale.sg-host.com. Follow FMI on Twitter and LinkedIn.

Angler Environmental Acquired by Resource Environmental Solutions

FMI Capital Advisors Inc., a subsidiary of FMI Corporation, is pleased to announce the acquisition of Angler Environmental by Resource Environmental Solutions (RES), a portfolio company of KKR. FMI Capital Advisors acted as the exclusive financial advisor to Angler Environmental for this transaction.

Angler Environmental will now be doing business as “Angler Environmental, a RES company” during a transitional integration period. Angler’s entire staff joins the RES team and will continue to operate office locations in Virginia, North Carolina, Maryland and Florida. Lee Goodwin and Don Seaborn join RES as general managers of the Mid-Atlantic Region.

“RES is excited to welcome the entire Angler Environmental team. Angler Environmental has a tremendous reputation in the water resource sector, delivering innovative solutions to preserve and protect watershed ecosystems,” said Elliott Bouillion, president and CEO, RES. “The addition of Angler bolsters RES’ ability to deliver comprehensive ecological solutions by integrating ecological construction, environmental inspections and maintenance, shoreline stabilization, stream design, and stormwater and TMDL compliance with RES’ current capabilities.”

“We are delighted to join RES,” said Lee Goodwin and Don Seaborn, founders of Angler Environmental. “From our initial meetings, we knew that RES and Angler had very similar cultures, with focused and aligned missions to supply industry-leading ecological solutions that resolve water resource challenges in our communities. Our team looks forward to joining forces with RES and providing customers with ecological solutions for wetlands, streams, species and water quality that facilitate project permitting, enable compliance and address enforcement needs.”

Angler Environmental provides state-of-the-art water resource and ecological restoration solutions across the Mid-Atlantic states. By combining professional offerings such as ecological feasibility, design, permitting and mitigation with implementation capabilities such as surveying, construction, monitoring and maintenance, Angler Environmental offers fully integrated services throughout the life of a project. For more information, visit www.anglerenvironmental.com.

Resource Environmental Solutions (RES) delivers commercial solutions that facilitate investment and sustainable economic development while maintaining responsible environmental stewardship. Since 2007, RES has restored, enhanced, rehabilitated, preserved and conserved more than 40,000 acres of wetlands, streams and habitats in environmentally sensitive areas. RES is a part of KKR’s Green Solutions Platform, highlighting companies that drive meaningful business and environmental benefits. For more information, visit www.res.us.

About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving companies in Engineering and Construction, Infrastructure and the Built Environment. With over 600 completed transactions, our unique industry focus enables us to provide our clients with unparalleled insight and advice. Clients gain access to our extensive network of industry contacts and relationships, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:

Greg Powell – Director
gpowell@fminet.com
919-785-9217

Media Contact:

Dave Harrell – Chief Marketing Officer
dharrell@fminet.com
919.785.9212

AGC/FMI Risk Management Study Reveals Changing Environment

Raleigh, N.C. – September 22, 2016
FMI Corporation, the leading provider of management consulting and investment banking services to engineering and construction, infrastructure and the built environment, is pleased to announce the release of the “AGC/FMI 2016 Risk Management Study”—a joint effort between FMI and AGC’s Surety Bonding and Risk Management Forum.

In this study, AGC and FMI explore the key risks that contractors face in today’s business environment and the various ways that they deal with those risks. Study findings are based on 83 responses from best-in-class companies that collectively generate approximately $50 billion in industry revenue annually. Their responses suggest the following:

  • Today’s construction risk environment is drastically different than it was five years ago.
  • Skilled craft labor shortages, contract language and subcontractor default are top risks in today’s construction industry.
  • Construction firms are managing risk differently today.
  • Risk management effectiveness varies.
  • Mitigating and managing risk has become a strategic priority.

For the full analysis of the survey’s results, click here.


About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor. More than six decades of industry context, connections and leading insights result in transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

For more information, please visit http://hale.sg-host.com. Follow FMI on Twitter and LinkedIn.


Media Contact:

Clair Henneberry
FMI
919.785.9248
chenneberry@fminet.com

Groom Energy Solutions LLC Acquired By DK Energy

September 21, 2016 – FMI Capital Advisors Inc., a subsidiary of FMI Corporation, is pleased to announce the acquisition of Groom Energy Solutions LLC by DK Energy. FMI Capital Advisors acted as the exclusive financial advisor to Groom for this transaction.

Over the last decade, Massachusetts based Groom Energy, has forged a reputation as a specialist in energy efficiency. Groom Energy offers optimized solutions to customers who are ready to cut their energy bills and curb their carbon footprint. Clients include regional and national names in the retail, refrigeration, hotel and food-processing industries.

DK Energy US, a subsidiary of the EDF group, is tasked with developing in the United States the business of Dalkia, one of the leading providers of energy services in France. DK Energy US offers its clients tailor-made solutions scaled to fit each building, city, municipality, region and industrial site. DK Energy US rises to the challenge of the energy transition and provides its clients with expertise covering the entire energy chain, from energy supply to optimization of their energy consumption, as well as operation and maintenance of installations. All DK Energy US’s solutions are paired with energy efficiency commitments and long-term performance guarantees.

Jon Guerster, CEO of Groom Energy Solutions: “I am delighted to join EDF and open up real growth opportunities for Groom Energy Solutions employees as part of a group that understands our business, our approach and our view of the market. We share Dalkia’s service culture, which will allow us to reach our full growth potential.”

Jean-Michel Mazalérat, Dalkia Chairman and CEO: “I am particularly proud of this US acquisition, which is further proof of the commitment and hard work of our international business development teams. I would like to wish everyone at Groom Energy Solutions a warm welcome to the group. They will help us develop our solutions in the United States while continuing to innovate in managing the way electricity is used. This is a huge milestone in our international business development, in a key country with strong growth potential where the EDF Group has already established a presence with a workforce of more than 1,600 people.”


About FMI Capital Advisors

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving companies in Engineering and Construction, Infrastructure and the Built Environment. With over 600 completed transactions, our unique industry focus enables us to provide our clients with unparalleled insight and advice. Clients gain access to our extensive network of industry contacts and relationships, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:

 Tim Huckaby – Managing Director
thuckaby@fminet.com
303.398.7265


About FMI Corporation

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor. More than six decades of industry context, connections and leading insights result in transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

For more information, please visit http://hale.sg-host.com. Follow FMI on Twitter and LinkedIn.

Media Contact:

Dave Harrell – Chief Marketing Officer
dharrell@fminet.com
919.785.9212

FMI Releases Quarterly Publication: Leading in Uncertain Times: Adapt to Win

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Raleigh, North Carolina – September 13, 2016. FMI Corporation, the leading provider of management consulting and investment banking services to the engineering and construction, infrastructure and the built environment, is pleased to announce the release of its third “FMI Quarterly” issue for 2016. The publication (co-sponsored by Zurich) comprises a collection of industry insights and strategies focused on how engineering and construction firms can navigate today’s complex, volatile and fast-changing business environment.

Chris Daum, FMI’s CEO, states, “With the rapid pace of change transforming the global business landscape, company leaders are feeling ill-equipped to navigate today’s constantly evolving industry environment. Classic approaches to strategy such as three- to five-year business plans that assume predictability in financing, economic cycles and competitive landscapes have become irrelevant and no longer work. In fact, organizations that are reactive versus proactive in this environment are more likely to be left behind.”

In this “FMI Quarterly” edition, authors present the latest research and concepts around adaptive strategy, agility (both at the leader level and at the organizational level) and strategic thinking in a VUCA world. This issue also offers new facts on increasing international interest in the U.S. infrastructure market and describes megatrends such as autonomous vehicles and emerging fleet technology that will reshape the engineering and construction industry.


About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor. More than six decades of industry context, connections and leading insights result in transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

For more information, please visit http://hale.sg-host.com. Follow FMI on Twitter and LinkedIn.


Media Contact:

Clair Henneberry
FMI
919.785.9248
chenneberry@fminet.com

FMI Releases the 2016 Executive Compensation Survey

September 7, 2016

FMI Corporation, the leading provider of management consulting and investment banking services to engineering and construction, infrastructure and the built environment, is pleased to announce the publication of its 2016 Executive Compensation Survey. The survey includes data from 71 companies representing over 3,400 executive and business unit employees across 64 positions within U.S. engineering and construction, infrastructure, and built environment firms.

Survey Highlights:

Survey participation increased 6% from 2015 to 2016, which resulted in the most robust compensation dataset for executive and business unit positions reported to date.

  • 42% of the Top 50 ENR construction companies participated in FMI’s 2016 Executive Survey
  • General Managers reported the largest amount of data from over 400 incumbents
  • Chief Administrative Officers showed the largest percent increase in base salary

Mike Rose, FMI’s Compensation, Manager of Data Services states, “The construction industry continues to experience a war for talent. This includes executives as reflected in the general increase in base pay and total compensation which reverses the recent downward trend and reflects the upward trend of profits in the industry.”

FMI is in its 21st year of providing critical market compensation data to the industry. Deep knowledge of labor market data and industry trends is a fundamental building block of an effective pay policy—the very cornerstone of a good human capital investment approach. This information is critical for today’s leaders to drive organizational success and long-term employee performance.

 

CLICK HERE TO DOWNLOAD AN EXCERPT OF THE SURVEY

 

To learn more about FMI’s Salary and Benefits surveys, please visit: http://hale.sg-host.com/compensation/dataservices.html

 

Contact: fmisurveysales@fminet.com


About FMI:
For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure, and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor. More than six decades of industry context, connections, and leading insights leads to transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

Sector Expertise

  • A/E and Environmental
  • General Contractors/CM
  • Heavy Civil
  • Industrial
  • Specialty Trades
  • Utility T&D
  • Clean Tech and Energy Services
  • Construction Materials
  • Building Products
  • Oil and Gas
  • Private Equity
  • Owners

Media Contacts

David Harrell
FMI Corporation
919.785.9212
DHarrell@fminet.com

FMI Nonresidential Construction Index Drops 4 Points in the Third Quarter

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Raleigh, NC, September 29, 2016

FMI’s NRCI dropped 4 points in the third quarter to 57.3. That score is well within growth range with a value above 50. However, over the past four quarters, we are seeing greater variability compared to previous years. While most components in the index are still in a positive range, scores have dropped consistently since the last quarter.

Predicting the recession: We asked panelists to give their opinion about when they think the next recession will begin, specifically in the construction industry. Overall, 78% didn’t expect a recession until at least the first half of 2018, and 38% of those respondents didn’t expect a recession for at least two years.

NRCI Third Quarter 2016 Highlights:

Overall Economy: NRCI Panelists’ view of the overall economy dropped 7.3 points in the third quarter. This is a sharp drop from the second quarter results.

Overall Economy Where Panelists Do Business: As with the overall economy, panelists’ optimism in the second quarter seems to have pulled back to what we have seen in previous quarters. Now at 60.4, this NRCI component continues to hover in a positive range.

Panelists’ Construction Business: Panelists’ reported that their outlook for their own business slowed somewhat this quarter, dropping 5.1 points to 70.9. A few actually welcomed the change since some markets have been “overheated.”

Nonresidential Building Construction Market Where Panelists Do Business: At 67.3, the nonresidential market in which panelists work is still registering high on the component scale, but 7.0 points lower compared to last quarter.

Expected Change in Backlog: The index component for expected change in backlog dropped 7.2 points in the third quarter to 58.9. The median backlog for all panelists was 10 months for the third quarter, which is a drop from the last three quarters but on par with the past two years, where backlog hovered between nine and 10 months.

Cost of Construction Materials and Labor: The index for materials costs dropped 2.9 points, indicating materials prices are still rising. Likewise, the labor cost component, although unchanged from last quarter, continues to indicate higher labor costs due to persistent labor shortages.

Productivity: Productivity continues to be a big concern as the component index slipped to 46.5, or 5.9 points below last quarter’s results. This is the lowest score for productivity since we began publishing the NRCI report in 2008.

DOWNLOAD REPORT


About FMI:
For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure, and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor.  More than six decades of industry context, connections, and leading insights leads to transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

Sector Expertise

  • A/E and Environmental
  • General Contractors/CM
  • Heavy Civil
  • Industrial
  • Specialty Trades
  • Utility T&D
  • Clean Tech and Energy Services
  • Construction Materials
  • Building Products
  • Oil and Gas
  • Private Equity
  • Owners

Media Contacts

David Harrell
FMI Corporation
919.785.9212
DHarrell@fminet.com

FMI Releases the 2016 Construction Professional Compensation Survey

Raleigh, North Carolina – July 28, 2016. FMI Corporation, the leading provider of management consulting, investment banking and people development services to the engineering and construction industry, is pleased to announce the publication of its 2016 Construction Professional Compensation Survey. The survey includes data from 97 companies representing over 48,000 employees across 57 positions within U.S. engineering and construction firms.

Survey Highlights:

  • Survey participation increased 14% from 2015 to 2016, which resulted in the most robust compensation dataset for field salaried professionals reported to date.
  • Mechanical Electrical Plumbing (MEP) positions reported the largest year-over-year salary increases exceeding twice the national average.
  • A majority (60%) of eligible incumbents received an annual bonus over $10,000.

Mike Rose, FMI’s Compensation, Manager of Data Services states, “Business is brisk and markets are tightening. As these trends continue, the decline in the construction labor force is having an impact in areas where skilled worker shortages are now prevalent. Understanding market pay trends allows leaders to plan more accurately for the future and adapt to important developments that are fundamentally reshaping the industry.”

FMI is in its 21st year of providing critical market compensation data to the engineering and construction industry. Deep knowledge of labor market data and industry trends is a fundamental building block of an effective pay policy—the very cornerstone of a good human capital investment approach. This information is critical for today’s leaders to drive organizational success and long-term employee performance.

CLICK HERE TO DOWNLOAD AN EXCERPT OF THE SURVEY

 

To learn more about FMI’s Salary and Benefits surveys, please visit: http://hale.sg-host.com/compensation/dataservices.html

Contact: fmisurveysales@fminet.com


About FMI

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure, and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor.  More than six decades of industry context, connections, and leading insights leads to transformational outcomes for our clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

Sector Expertise:

  • A/E and Environmental
  • General Contractors/CM
  • Heavy Civil
  • Industrial
  • Specialty Trades
  • Utility T&D
  • Clean Tech and Energy Services
  • Construction Materials
  • Building Products
  • Oil and Gas
  • Private Equity
  • Owners

METAWATER Co., Ltd. Merges with Aqua-Aerobic Systems

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AquaAerobic_Metawater_forweb_square

August 9, 2016 – FMI Capital Advisors Inc., a subsidiary of FMI Corporation, is pleased to announce the merger of Metawater Co. , Ltd. (Tokyo, Japan), and Aqua-Aerobic Systems, Inc. (Love Park, Illinois, USA).

Metawater offers optimum solutions for creating circulation of water recourses while focusing on the plant engineering business and service solution business. Aqua-Aerobic Systems, Inc. is a leader in the design, application and manufacture of wastewater treatment equipment and systems for municipal and industrial markets, worldwide.

The merger will place Aqua-Aerobic, including its subsidiary, Mecana Umwelttechnik (Reichenburg, Switzerland), under METAWATER USA INC. (MUSA), the company’s U.S. subsidiary with current operations in Rutherford, N.J.

FMI Capital Advisors Inc. represented Metawater in the transaction.

The collaboration provides Aqua-Aerobic Systems with a larger platform to expand internationally and enables the METAWATER Group and Aqua-Aerobic Systems to gain access to each company’s technologies that will enhance respective product offering portfolios. Through this merger, METAWATER USA acquired additional Aqua-Aerobic Systems resources including additional established relationships with sales agents, consulting firms and contractors to support its growth strategy and strengthen its business through expansion into the U.S. and other markets.


About FMI Capital Advisors: 

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving organizations in Engineering and Construction, Infrastructure and the Built Environment. With over 700 completed transactions, our unique industry focus enables us to provide our clients with unparalleled insight and advice. Clients gain access to our extensive network of industry contacts and relationships, deep market knowledge and technical expertise.

FMI Capital Advisors Contact:

Greg Powell – Director
gpowell@fminet.com
919.785.9217


About FMI Corporation: 

For over 60 years, FMI has been the leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure, and the built environment.

FMI serves all sectors of the engineering and construction, infrastructure and built environment industries as a trusted advisor. More than six decades of industry context, connections, and leading insights leads to transformational outcomes for clients and the industry.

FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results.

Media Contact:
Dave Harrell – Chief Marketing Officer
dharrell@fminet.com
919.785.9212

FMI Forecasts Steady Growth in Construction for 2016

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Raleigh, NC JULY 28, 2016 – FMI’s forecast for the second quarter has not changed much from our first quarter report with growth for construction put in place expected to be 6%, although we have adjusted total residential down a bit and nonresidential construction up. The largest growth markets are lodging (14%), office (11%) and commercial (8%); together these three markets represent 33% of nonresidential buildings for 2016.With the exception of commercial construction, all are strong markets but growing slower than in 2015. Growth expectations in these markets were supported by FMI’s Second Quarter Nonresidential Construction Index (NRCI) report. Construction executives answering the NRCI survey increased their optimism to drive the total NRCI Index score from 55.6 in the first quarter to 61.3 in the second quarter.

Randy Giggard, FMI’s Manager, Marketing Information, states, “Despite all the distractions (Fed rates, oil prices, China, Brexit, terrorism), the construction industry continues to plod along undeterred at a growth rate of 6%.  The prudent among us will keep watch for signs of the next recession.  But at this time, it seems most likely that the industry will continue to expand for at least another 18 months.”

Current conditions are looking good for the construction industry:

  • Interest rates remain relatively low for borrowers building homes and commercial projects.
  • Unemployment remains low, so more people have jobs and are spending money—on the other hand, low unemployment translates into higher wages and difficulties finding workers.
  • The consumer price index (CPI) shows little sign of inflation. Oil and energy prices also remain low. The numbers lead us to expect continued growth that could be sustained for several years.

However, there are tensions behind the numbers. Oil and gas producers mostly need higher prices to keep people employed and make a profit. This is especially true for those countries that derive most of the country’s income from oil and gas production. The Federal Reserve has been looking for an opportunity to raise interest rates to encourage banks to lend and savers to save, but wages have not shown much sign of rising rapidly for the working class although unemployment remains below 5%. Even though current conditions are mostly good, we can see there is tension in the economy and wonder what changes will come in the summer.


About FMI

FMI is the leading provider of management consulting, investment banking† and people development services 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. Follow us on Twitter and LinkedIn.

DOWNLOAD FULL REPORT HERE


Media Contacts

Rebecca Esler
FMI Corporation
(919) 785-9209
REsler@fminet.com

FMI Releases Quarterly Publication: Engineering, Construction and Risk: Improving Your Odds of Success

Raleigh, North Carolina – June 15, 2016. FMI Corporation, the leading provider of management consulting and investment banking services to the engineering and construction industry, is pleased to announce the release of its second FMI Quarterly issue for 2016. The publication (co-sponsored by Zurich) comprises a collection of industry insights and strategies focused on how engineering and construction firms can mitigate and manage risk in today’s dynamic business environment.

Chris Daum, FMI’s CEO, states, “The main theme running through all of the articles of this edition deals with the issue of risk. A generation ago, the issue of risk revolved around owner and project selection, project execution, and effectively dealing with change orders. The ballgame has totally changed today. We’re dealing with issues of risk that, by themselves, in spite of world-class execution, can derail even the best of contractors.”

The FMI Quarterly presents a variety of approaches and strategies for addressing specific risks like selling a company or subcontractor defaults as well as more widely applicable approaches for assessing project risk profiles, to name a few.

The FMI Quarterly also updates one of FMI’s classic studies “Why Contractors Fail,” which presents root causes of contractor failure, and discusses research findings in the context of today’s changing risk environment.

Hugh Rice, senior chairman at FMI and one of the authors of the original study, states, “Construction is an ego-driven business. To be a successful contractor you have to be an optimist. Self-confidence is key to success, but over-confidence and feeling invincible can lead to over-committing the organization and often results in spectacular failures.”


About FMI

Founded in 1953 by Dr. Emol A. Fails, FMI is the leading management consulting and investment banking firm dedicated exclusively to the engineering and construction industry. FMI professionals serve all sectors of the industry and combine more than 60 years of industry context and leading insights to achieve transformational outcomes for clients. Industry Focus. Powerful Results.

For more information, please visit http://hale.sg-host.com. Follow FMI on Twitter and LinkedIn.


Media Contact:

Rebecca Esler
(919) 785-9209
REsler@fminet.com

Raleigh, NC – Newcomb and Company has been acquired by EMCOR

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FMI Capital Advisors Inc., a subsidiary of FMI Corporation, is pleased to announce the acquisition of Newcomb and Company, a leading full service commercial mechanical contractor headquartered in Raleigh, NC by EMCOR Group, Inc. (NYSE: EME), a Fortune 500® leader in mechanical and electrical construction, industrial and energy infrastructure, and facilities services for a diverse range of businesses. Terms of the transaction were not disclosed.

FMI Capital Advisors Inc. represented Newcomb in the transaction.

“We are delighted to become part of EMCOR and combine forces with the EMCOR Services team,” said Robert Newcomb, owner and President of Newcomb and Company. “Newcomb and Company has a tradition of performance and client service that we believe is a perfect match with EMCOR ‘s culture. We are all very excited about the future and continuing to serve our clients with excellence.”

Founded over 60 years ago, Newcomb and Company provides mechanical contracting and services for commercial, industrial, educational, institutional, and residential clients throughout the North Carolina marketplace. Newcomb and Company will be part of EMCOR’s U.S. Building Services operations.


About FMI Capital Advisors:

FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm exclusively serving the Engineering and Construction / Infrastructure industry. With over 700 completed transactions, our unique industry focus enables us to provide our clients with valuable insight and advice. Clients gain access to our unparalleled network of industry contacts and relationships, deep market knowledge and technical expertise, based on decades of experience.

FMI Capital Advisors:

Landon R. Funsten
Senior Managing Director
lfunsten@fminet.com
919.785.9284

Daniel T. Shumate
Vice President
dshumate@fminet.com  
919.785.9266


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

FMI Nonresidential Construction Index (NRCI) Bounces Back in the Second Quarter 2016

NRCIBannerQ2_2016

Raleigh, NC, May 20, 2016

The NRCI index for the second quarter bounced back from 55.6 in the first quarter to a current 61.3. That is a solid recovery, and almost every component of the NRCI moved in a positive direction this quarter. The main exceptions are the costs of labor and construction materials, which are holding down the rise in the NRCI score. Also worth noting, the three-year outlook for most major nonresidential construction markets slipped somewhat from last quarter.

We also asked panelists to give their estimations and experience with employee turnover rates, considering the tight labor market. On average, NRCI panelists are experiencing a 6.9% rate of turnover for office/management positions and an 8.3% rate of turnover for field management positions. As our analysis shows, this is a higher turnover rate for construction than the national average for all industries. In the comments associated with our questions, we received a number of reasons for turnover. Some panelists noted they have very little turnover. One of the most cited reasons for turnover at this time was the improved market for job opportunities for younger employees.

NRCI Second Quarter 2016 Highlights

Overall Economy: After dropping 1.9 points last quarter, the index for the overall economy rebounded 8.9 points in the second quarter to a solid 65.4.

Overall Economy Where Panelists Do Business: The economic situation where panelists do business increased 12.6 points in the second quarter to 69.9

Panelists’ Construction Business: Panelists’ construction business hit the highest point in four quarters at 76.0.

Nonresidential Building Construction Market Where Panelists Do Business: Panelists’ outlook for the markets they work in leads the indexes for NRCI components, improving 13.7 points to 74.3.

Expected Change in Backlog: The expected change in backlog rebounded to 66.1 after a two-quarter slump. The months-in-backlog number has held at 11 months for the last two quarters.

Cost of Construction Materials and Labor: The index for cost of materials dropped 13 points, indicating contractors are seeing higher prices for construction inputs. The cost of labor index also dropped to just 12 points. Both labor and materials cost increases work to keep the NRCI Index score down.

Productivity: While it may not be enough to offset higher prices, productivity made a rare improvement of 3.3 points in the second quarter to 52.4. It would be a good sign if this improvement becomes a trend.


About FMI

Founded in 1953 by Dr. Emol A. Fails, FMI is the leading management consulting, investment banking and people development firm dedicated exclusively to the engineering and construction industry. FMI professionals serve all sectors of the industry and combine 60+ years of industry context and leading insights to achieve transformational outcomes for our clients.

DOWNLOAD REPORT

FMI has subject matter experts in the following practice areas and serves clients through the U.S., Canada and Internationally:

Management Consulting

  • Strategy
  • Market Research
  • Business Development
  • Risk Management
  • Compensation
  • Peer Groups
  • Performance Management

Investment Banking

  • M&A Representation
  • Valuation & Fairness Opinions
  • Private Capital Placement
  • Ownership Transfer Planning

Leader Development

  • Organizational Development
  • Leadership Training
  • Executive Coaching
  • Succession Planning
  • Training & Talent Development

Media Contacts

Rebecca Esler
FMI, Marketing Manager
(919) 785-9209
REsler@fminet.com

FMI Forecasts 6 Percent Growth in Construction for 2016

Updated: FMI Forecasts 6 Percent Growth in Construction for 2016

Raleigh, N.C. April 14, 2016– Construction had a busy year in 2015, adding 11% growth to reach nearly $1.1 trillion in construction put in place. In current dollars, that is the highest total since 2008 and the highest growth rate since 2005. Signs that the rate of growth for the industry is slowing have caused us to forecast a slower 6% rate of growth to reach $1.6 trillion in 2016. In nonresidential construction, highway and street construction will be the volume leader, in part thanks to a new highway bill and the fact that this is always a top sector.

Forecasts for some key sectors:

  • Manufacturing – Manufacturing construction took a heavy hit during the Great Recession, but it has more than caught up as of 2015, with a whopping growth of 44% for the year and a more modest 9% growth expected for 2016. In either case, new records are being set for manufacturing construction investment. While, at 76.1 for February 2016, manufacturing capacity utilization is still below the long-term average of 78.5, there are signs that new capacity is being well utilized.
  • Lodging – Lodging construction continued to rise above even increasingly optimistic forecasts for 2015 to end the year with 31% growth. At this point, FMI again expects the rate of growth to cool, but, at 15% for 2016, it will still be the fastest-growing construction market. With an expected value of $24.3 billion for 2016, this market is well below its high of $35.8 billion in 2008, but we expect these numbers to be more sustainable with a mix of new venues and refurbishing established locations.
  • Office – After a strong show of growth in 2015 (22%), we expect office construction to cool in 2016 to a still respectable rate of 9% growth. Much of the growth has come from an increase in employment, especially in high-tech job markets. These high growth rates will taper off to more sustainable rates in 2017 and beyond. Continued growth in the technical sector and in larger metropolitan areas like New York City will keep rents and absorption of new space high.
  • Power – After a strong year in 2014, power construction declined sharply in 2015, losing 14%. FMI expects another 4% drop in 2016, thus giving up the gains realized since 2012. The power industry is in flux due to changing fuel supplies using more natural gas and less coal as well as variable rates of growth in alternative energy sources like solar and wind. Power plants must be updated to keep up with changing requirements as well as to manage distributed generation sources. Despite losing subsidies and the lower cost of oil and gas, wind and solar power generation facilities are growing. The power industry will continue to consolidate as the average consumer reduces power use, but growth will slow in 2016 and 2017.

Download the Q1 Construction Outlook


About FMI

Founded in 1953 by Dr. Emol A. Fails, FMI is the leading management consulting, investment banking and people development firm dedicated exclusively to the engineering and construction industry. FMI professionals serve all sectors of the industry and combine 60+ years of industry context and leading insights to achieve transformational outcomes for our clients.

FMI has subject matter experts in the following practice areas and serves clients through the U.S., Canada and Internationally:

Management Consulting

  • Strategy
  • Market Research
  • Business Development
  • Risk Management
  • Compensation
  • Peer Groups
  • Performance Management

Investment Banking

  • M&A Representation
  • Valuation & Fairness Opinions
  • Private Capital Placement
  • Ownership Transfer Planning

Leader Development

  • Organizational Development
  • Leadership Training
  • Executive Coaching
  • Succession Planning
  • Training & Talent Development

Follow FMI on LinkedIn!


Media Contacts

Rebecca Esler
FMI
(919) 785-9209
REsler@fminet.com

FMI Releases Quarterly Publication: The Talent Challenge – Winning in the New Reality

FMI Releases Quarterly Publication: The Talent Challenge – Winning in the New Reality

Raleigh, North Carolina – March 22nd, 2016. FMI Corporation, the leading provider of management consulting, investment banking and people development services to the engineering and construction industry, is pleased to announce the release of its first Quarterly issue for 2016. The publication (co-sponsored by Zurich) comprises a collection of industry insights and strategies focused on one of the engineering and construction industry’s biggest challenges: its people.

Chris Daum, FMI’s CEO, states, “Today’s engineering and construction industry talent challenges are not new. However, we are at a critical inflection point: Ten thousand baby boomers are retiring daily across the U.S., leaving behind an incredible void of knowledge and experience in our industry. And there is no magic bullet to solve this problem anytime soon.”

The Quarterly presents a variety of approaches and strategies for confronting talent challenges at different organizational levels. Article topics are organized around four key industry issues:

  • Attracting and retaining a young workforce
  • Lack of skilled workers
  • Retiring boomers and succession planning
  • The increase in human risks (opioid abuse)

Sabine Hoover, FMI’s content director and chief editor for the Quarterly explains, “The solutions and strategies that we present in this Quarterly are intended to help and inform readers as they deal with talent challenges in their daily conversations and decision-making. This is by no means an exhaustive list of solutions but instead a springboard for starting an industry-wide conversation on how to tackle this serious problem.


About FMI

Founded in 1953 by Dr. Emol A. Fails, FMI is the leading management consulting, investment banking and people development firm dedicated exclusively to the engineering and construction industry. FMI professionals serve all sectors of the industry and combine 60+ years of industry context and leading insights to achieve transformational outcomes for our clients.

FMI has subject matter experts in the following practice areas and serves clients through the U.S., Canada and Internationally:

Management Consulting

  • Strategy
  • Market Research
  • Business Development
  • Risk Management
  • Compensation
  • Peer Groups
  • Performance Management

Investment Banking

  • M&A Representation
  • Valuation & Fairness Opinions
  • Private Capital Placement
  • Ownership Transfer Planning

Leader Development

  • Organizational Development
  • Leadership Training
  • Executive Coaching
  • Succession Planning
  • Training & Talent Development

For more information, please visit http://hale.sg-host.com. Follow FMI on LinkedIn.


Media Contacts

Rebecca Esler
FMI
(919) 785-9209
REsler@fminet.com

FMI Partners with Wynford Group for Canadian Salary Data

FMI Partners with Wynford Group for Canadian Salary Data

Raleigh, NC March 2, 2016 – FMI is pleased to announce that we have collaborated with Wynford Group in order for our clients to have access  to Canadian National Construction Survey Data. Currently FMI only surveys companies in the U.S. By collaborating with The Wynford Group, clients are able to leverage survey data across North America bringing value to all E&C businesses of all sizes.

About Wynford Group

The Wynford Group is a Canadian management consulting company founded in 1991 with a solid base of experience with both private and public sector organizations. Based in Calgary, Alberta, we have a network of affiliated offices in Edmonton, Vancouver, Winnipeg, Toronto, and Atlantic Canada.

The Wynford Group has become well-known as one of Western Canada’s leading total rewards consulting firms. The Wynford Group is acclaimed for its knowledge of the Alberta and National compensation markets and expertise in competitive market analysis with over 25 years of experience in developing a broad range of Compensation and Total Rewards projects suited to clients specific needs in a variety of industry sectors.

The Wynford Group is particularly well known for their expertise in Compensation Surveys, Performance and Reward Strategies, and the development of Compensation Structures.

The Wynford Group’s Construction Survey has been conducted annually since 1996, and is Canada’s only national construction-focused survey. Features include:

  • Over 140 positions in 35 job families; including Construction Management, Safety, Quality, and Equipment.
  • Over 70 participating organizations from across Canada
  • Detailed salary data and bonus analysis
  • COMPASS Custom Report Tool allows breakdowns by Type of Construction, Location, Revenue Size, or any combination therein

To learn more about the Wynford Group, please visit http://www.wynfordgroup.com


About FMI

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, please visit http://hale.sg-host.com.  Follow FMI on Twitter and LinkedIn.

Management Consulting

  • Strategy
  • Market Research
  • Business Development
  • Risk Management
  • Compensation
  • Peer Groups
  • Performance Management

Investment Banking

  • M&A Representation
  • Valuation & Fairness Opinions
  • Private Capital Placement
  • Ownership Transfer Planning

Leader Development

  • Organizational Development
  • Leadership Training
  • Executive Coaching
  • Succession Planning
  • Training & Talent Development

Media Contacts

Rebecca Esler
FMI Corporation
919.785.9209
REsler@fminet.com

FMI Nonresidential Construction Index (NRCI) Down in the First Quarter 2016: Expectations for a Slowing Economy

Raleigh, NC, February 18, 2016

The NRCI index for the first quarter 2016 dropped 3.9 points to 55.6. That is the third consecutive quarter that the NRCI has dropped since reaching 64.9 in the second quarter of 2015. An index number of 55.6 by itself is an indication of growth, albeit slower growth. The last time the NRCI was in that range was the fourth quarter of 2012, and the index began to climb in the ensuing quarters. What we are concerned about is not the single-quarter results but the recent trend. Nonetheless, it is worth noting that 55.6 is the median score for the NRCI since its inception in the fourth quarter of 2007 and slightly above the historical average. On the other hand, after being over 60.0 for seven quarters, maybe we have reached the Goldilocks Zone at least for the current quarter.

In the results of our NRCI survey this quarter, we find both hot and cold responses. It is at first a puzzlement to understand why so many NRCI panelists have downgraded their views of the economy and nonresidential construction markets when most who wrote comments also said they are busier than ever and hiring plans are nearly the same or higher than last year. The immediate problem is that construction companies cannot find the people they need to hire in order to increase productivity, work off backlogs and develop good people to run the company as current management starts to retire. Then there is the uncertainty hanging over the economy that causes concerns that the markets are likely to cool too fast.

Right now, many in the industry seem to agree with what one panelist wrote in our responses to the question about challenges for 2016: “Opportunity will be ample, industry capacity to push it through the pipe as quickly as needed will be the challenge.” What we learn from this, the 34th round of the NRCI, is that contractors need skilled employees to keep up with the work they have in their backlogs, execute plans for future growth, and develop good people to run the company as current management starts to retire.

NRCI First Quarter 2016 Highlights

  • NRCI panelists’ outlook for the overall economy continued to slip in the first quarter, moving from 58.3 to 56.5. This is a drop of over 20 points from Q2 2015.
  • Overall Economy Where Panelists Do Business: The component for the economy where panelists do business dropped 7.5 points from 64.8 to 57.3 in the first quarter.
  • Panelists’ Construction Business: Panelists’ construction business is still strong at 64.1, but that represents a drop of 5.8 points since the fourth quarter 2015.
  • Nonresidential Building Construction Market Where Panelists Do Business: At 60.6, the nonresidential construction markets where panelists do business are still in solid growth mode; however, this component signals expected slower growth, dropping 4.7 points since last quarter.
  • Expected Change in Backlog: The median backlog for all responses fell from a high of 12 months to 11 months, still higher than the historical average for the NRCI survey.
  • Cost of Construction Materials and Labor: While still considered high, the cost of materials component improved 7.5 points to 38.1. Little changed since last quarter, the cost of labor continues to rise. Note that the NRCI composite score is affected negatively when cost of major inputs of materials and labor increase.
  • Productivity: While productivity gained slightly in the first quarter, it is still the most difficult area to make significant improvements in the construction industry.

About FMI

FMI is the leading provider of management consulting, investment banking and leader development services to the engineering and construction industry. We work in all sectors 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, and 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, please visit http://hale.sg-host.com.  Follow FMI on Twitter and LinkedIn.

Download the NRCI Quarter 1 Report


Media Contacts

Rebecca Esler
FMI Corporation
(919) 785-9209

Resler@fminet.com

FMI Revises 2015 Construction Growth Upward to 6 Percent Manufacturing, Lodging, Office, and Amusement and Recreation among Top Growing Sectors

Raleigh, NC January 13, 2016 – FMI reports that construction put in place will exceed earlier forecasts to end the year up around 10%. Construction growth will slow to 8% in 2016, but will still be well ahead of GDP according to the Q4 FMI Construction Outlook released today.

Construction in 2016 is expected to reach $1.14 trillion in 2016, the highest total since 2007, unadjusted for inflation. As in 2015, one of the major challenges for the industry will be recruiting and training a talented workforces.

According to Chris Daum, FMI CEO, “2016 will challenge contractors’ growth plans, and there will always be new challenges to face. However, economic factors for construction are about the best we have seen since the recession, and we are looking for continued progress in 2016.”

The most notable improvements in growth have been for lodging (up 23%), office construction (up 19%), amusement and recreation (up 16%), and manufacturing (up 25%). The completion of the Panama Canal will mean a boost for manufacturing in Gulf Coast states. With little change since last quarter, manufacturing utilization rates were at 76.4% of capacity in October 2015, which has been consistent for the year. After two years of strong growth, manufacturing construction is expected to slow to a still respectable level of 115 in 2016. The latest news expected to boost highway and transportation spending is the passing of a highway transit bill. According to ASCE, “The FAST Act provides $305 billion for highway, transit and railway programs.

Forecasts for some key sectors:

  • Manufacturing – Manufacturing is currently the fastest-growing construction sector at 25% for 2015. However, we expect that rate to simmer in 2016 to 11%. Continued low energy prices will hold down capacity additions in the oil and gas sector, but help those relocating or expanding in other areas of manufacturing including the current boom in the petrochemical areas. Current fluctuations in the stock market and the future direction of the Chinese economy will be watched closely by those considering adding new manufacturing plants or relocating to the U.S. from offshore locations.
  • Lodging – Lodging construction exceeded earlier estimates for 2015, and we now expect 23% growth for year-end 2015 and 17% for 2016 to $23.05 billion. The current pace is expected to slow as the supply catches up with demand and average daily rate growth slows. Currently, increased business travel and improving room rates combine to bring this market back from overbuilt prerecession levels.
  • Office – Office construction has demonstrated a remarkable comeback in the past two years and is expected to end 2015 up 19%. Much of the growth has come from an increase in employment, especially in high-tech job markets. We expect growth to carry over into 2016 and beyond, but at a slower rate.
  • Residential – Currently, nationwide there is more demand than supply for housing, as the current supply is at 5.5 months as of November 2015. That compares with a supply of 5.1 months in March and a supply of 12.2 months at the height of the recession in January 2009. The average monthly supply since 1963 is 6.1 months.

To download a copy of the current Construction Outlook, click here. To receive the report on a quarterly basis, please email outlook@fminet.com. Contact Rebecca Esler for reprint permission at 919.785.9209 or via email, REsler@fminet.com.

Economic Headwinds, Rising Costs a Drag on Nonresidential Construction Sector Outlook, According to Q4 FMI Nonresidential Construction Index

Raleigh, NC, November 30, 2015 – The nonresidential construction sector is experiencing a slowdown as the economic recovery continues to taper and the industry is headed into the winter season, according to the FMI Nonresidential Construction Index Report (NRCI) for Q4 2015. The Index reflects the observations and sentiments of a sampling of construction industry executives nationwide.

FMI’s NRCI for Q4 2015 dropped 4 points to 59.5, the lowest score since the fourth quarter of 2013. The decrease was largely driven by the panelists’ declining outlook for the overall economy, which fell by 12.3 points to 58.3 from the last quarter. Panelists’ expectations of activity for the economic sectors in which they do business decreased to 64.8 points from 73.3 of last quarter, contributing to the conservative reading of the overall index. Cost of construction materials and labor continue to rise, increasing by 1.2 points to 30.6, indicating an expected bump in costs.

“Economic recovery momentum is losing steam and rising costs in labor and materials start to put a load on the industry,” said Chris Daum, President and CEO of FMI. “Next year will likely be more challenging for industry growth than 2015. . Firms that excel at recruiting and training the most skilled workforce will have a strategic edge in the marketplace.”

Highlights from the NRCI reveal challenges as the industry enters the last quarter of the year:

  • Overall Economy Where Panelists Do Business: Panelists’ business is slowing down with a grim outlook of the overall economy.
  • Panelists’ Construction Business: Although the panelists’ expectation of their construction activities slipped by 5.8 points to 69.9, it shows residual recovery momentum.
  • Expected Change in Backlog: The measure of expected change in backlog dropped to 62.2 from last quarter’s 68.2, a median of the past 12 months.
  • Cost of Construction Materials and Labor: The cost of labor and materials continues to go higher. Generally, it is expected that costs will rise as business improves, thus holding down the overall NRCI index number.
  • Productivity Flat: The productivity component continues to hang around 50.0, or a small slippage. It is currently at 47.9.

Skilled Talent Still a Concern

Availability of skilled employees continues to be a key concern for construction business executives. A majority (77%) of the panelists surveyed reveal their worry about not finding enough skilled labor on a national level. Many panelists believe the shortage of craft workers to be an ongoing generational challenge.

Click here to access the full report.


Media Contacts:

Yue Jiang
Peppercomm
(212) 931-6171
yiang@peppercomm.com

Rebecca Esler
FMI
(919) 785-9209
resler@fminet.com

FMI’s 2015 Industry Survey of Millennials in Construction Debunks Several Common Myths Surrounding This Largely Misunderstood Workforce

Raleigh, N.C., November 19, 2015 – FMI Corp, a leading provider of investment banking and management consulting services for the engineering and construction industry, announced the release of their report “Millennials in Construction- Learning to Engage a New Workforce.” Findings are based on a combination of survey responses and interviews from almost 400 individuals who work in the construction industry nationwide; half of those participants represent millennials (individuals born between 1980 and 2000).

“While the stigma exists that millennials are entitled, disloyal and lazy, it appears that this is not true,” explained Sabine Hoover, Content Director at FMI. According to FMI’s findings, millennials in the construction industry are indeed very dedicated and loyal to their companies and share similar values as baby boomers and Gen Xers when it comes down to career aspirations, attitudes and goals. Some of the report’s key highlights include:

  • An inspiring and well-communicated vision is critical to engaging millennials long term.
  • 74% of survey respondents expect to remain more than five years with their company.
  • 96% of survey respondents are willing to work beyond what is required of them to help the business succeed.
  • 98% of survey respondents stated that it was important for them to understand their career path and opportunities within their company.
  • Survey respondents listed competitive pay, work-life balance, and personal development as their top choices for staying engaged.

According to the authors, not unlike other generations that enter the workplace, millennials have new perspectives to share, new ideas about getting things done, and new ways of tackling problems. They also want to do more than just punch a clock and take home a paycheck. They are looking to add value, make an impact and find meaning in what they are doing. FMI suggests company leaders leverage these realities by ensuring that younger workers have a clear sense of purpose and an understanding of their roles within the larger plan.

The report also provides some practical insights on how to get started with developing a comprehensive talent strategy and a culture of engagement, including specific implications for the young workforce.

Paul Trombitas, research analyst with FMI and contributing author, adds, “Millennials are willing to work hard and put forth the effort when their company provides interesting and challenging work assignments that provide opportunity for career advancement.”

Click here to access the full report.


Media Contacts:

Yue Jiang
Peppercomm
(212) 931-6171
yiang@peppercomm.com

Rebecca Esler
FMI
(919) 785-9209
resler@fminet.com

FMI Corporation and Results Canada Announce New Partnership

FMI Corporation and Results Canada Announce New Partnership

New Partnership, FMI Results, Provides Mid-Market Businesses with Foundation to Maximize Growth

Raleigh, N.C. and Calgary, Alberta, November 18, 2015 – FMI Corporation, the leading provider of management consulting, investment banking, and leader development services to the Engineering & Construction (E&C) industry, and Results Canada, the Business Execution Experts, announced today the launch of FMI Results. Created to serve as a trusted advisor to the Canadian Engineering & Construction industry, FMI Results helps clients build a strong foundation to maximize success.

The creation of FMI Results allows mid-market E&C businesses to leverage FMI’s industry-leading expertise in ways that were not previously available including:

  • Training and Tools for companies to master the executional aspects of their business
  • Proven methodologies for improving processes and communications
  • Expertise in helping organizations maximize their potential
  • Understanding of the Alberta business climate and landscape
  • Deep E&C Industry expertise and experience

“FMI is excited to be partnering with Results Canada,” said Chris Daum, President and Chief Executive Officer of FMI Corporation. “Our alliance leverages Results Canada’s proven execution practices to enable middle-market E&C companies to refine their strategies, improve execution and, ultimately, TRANSFORM from good to great businesses.”

Backed by the deep industry experience and knowledge of both companies, FMI Results’ unique approach gives clients access to the proven tools and processes needed to gain a competitive edge in any economic environment.

“Focused on sustainability, our partnership with FMI allows clients to create a platform for growth in a time when many organizations of this size are challenged and threatened by current economic conditions, competition and change,” said Tim O’Connor, CEO of Results Canada.

With FMI Results as a strategic partner, businesses will not only be able to tackle immediate issues, but will also learn methodologies to address future challenges head-on.

“Every engagement with FMI Results will rely on thought leadership that has been developed over six decades, allowing clients to benefit from our shared vision, resources and expertise,” said Rusty Sherwood, Senior Consultant at FMI Corporation.


About FMI

Founded in 1953 by Dr. Emol A. Fails, FMI is the leading management consulting, investment banking and people development firm dedicated exclusively to the engineering and construction industry. FMI professionals serve all sectors of the industry and combine 60+ years of industry context and leading insights to achieve transformational outcomes for our clients.

FMI has subject matter experts in the following practice areas and serves clients through the U.S., Canada and Internationally:

Management Consulting

  • Strategy
  • Market Research
  • Business Development
  • Risk Management
  • Compensation
  • Peer Groups
  • Performance Management

Investment Banking

  • M&A Representation
  • Valuation & Fairness Opinions
  • Private Capital Placement
  • Ownership Transfer Planning

Leader Development

  • Organizational Development
  • Leadership Training
  • Executive Coaching
  • Succession Planning
  • Training & Talent Development

About Results Canada

Results Canada is committed to helping companies transform from “Good to Great”.  It acts as a trusted advisor to leaders of emerging growth firms, providing a unique blend of education, consulting, coaching, facilitation and accountability that drives higher levels of performance and sustainable success.  According to research and global business thought-leaders, execution is the biggest challenge for business owners and leaders today. Results is THE leader in business execution, and believes that the key to unlocking success for companies is disciplined execution.


Media Contacts:

Yue Jiang
Peppercomm
212.931.6171
yiang@peppercomm.com

Rebecca Esler
FMI Corporation
919.785.9209
resler@fminet.com

Greater Competition for Talent, Uncertain Economy and Value-Centric Contractor Selection Driving the Industry, According to FMI 2015 Quarterly

Talent Retention and Development, especially for Millennials, Seen as Critical to Companies’ Success

Raleigh, North Carolina – November 16, 2015 – FMI Corp, a leading provider of investment banking and management consulting services for the engineering and construction industry,  today released its fourth and final  2015 Quarterly report. The delayed impact of Federal Reserve actions on the E&C industry, a shift towards value-based contractor selection and renewed emphasis on the importance of retaining millennial employees are among key topics in the latest FMI Quarterly.

“The industry is experiencing a fundamental shift as contractors are asked to provide more value beyond competitive pricing as well as recruit and train  a younger  workforce to meet tomorrow’s challenges,” said Chris Daum, President and Chief Executive Officer. “Companies that  achieve these competitive advantages will not only stay ahead of the curve but also maintain success in the long term.”

Featuring eight articles from top FMI advisors, the report takes a deep dive into issues important to E&C firms’ bottom lines, including capitalization of earnings, pricing structures, hiring and retaining talent and risk associated with mergers and acquisitions. Each article provides E&C firms with the opportunity to reflect on strategies and tactics, as well as to consider what new forces are driving organizational change. The report also takes a fresh look at key findings from the latest installment of FMI’s M&A Advisor report and the Talent Development Survey.

Fed’s Decision on Interest Rates will Have a Delayed Impact on the Industry

A possible increase in the federal funds rate should not be a concern for construction companies, according to the report. Rather, an increase in the real or inflation-adjusted interest rate will negatively impact contractors’ capital investment decisions and a delayed influence on the environment in which they do business. However, in the short-term, improvement in the economy and increases in backlogs due to owners advancing projects based on lower rates will offset any negative impact stemming from modest rate increases.

Contractor Selection Shifts towards Value

The contractor selection process is changing from one based primarily on price to a process that takes into consideration the total value a contractor provides. Competition for talent is a key driver of the shift, allowing contractors to become more selective in terms of the customers and projects they pursue. Companies that want to stay ahead of the curve need to provide a premium in services they, based on experience, unique systems, depth of process, client knowledge and capabilities of staff and project teams.

Millennials are Great for the Construction Industry

A majority (74%) of millennials surveyed by FMI expect to remain more than five years with their company, and almost all (96%) express willingness to work beyond what is required to help their business succeed. Millennial hires’ loyalty, dedication and innovative thinking are key reasons why companies in the E&C industry should emphasize strategies to keep millennial workers. Companies should also consider other benefits that millennial employees bring, including tech savvy, work-life balance, influence on companies’ culture, and collaboration and communication skills.

Visit the FMI 2015 Quarterly


Media Contacts

Yue Jiang
Peppercomm
(212) 931-6171

yjiang@peppercomm.com

Rebecca Esler
FMI Corporation
(919) 785-9209

REsler@fminet.com

Skilled Labor Shortage Intensifies Despite Economic Recovery, According to FMI 2015 Talent Development Survey

Industry Calls for Standard Frameworks and Productive Conversations on Talent Retainment and Development

RALEIGH, NC, October 12, 2015 – FMI Corp, a leading provider of investment banking and management consulting services for the engineering and construction industry, has just released its 2015 Talent Development Survey in the Construction Industry, and the results reveal intensifying labor shortages, a widening gap between employer offerings and employee demands, and a lack of standard processes and frameworks among the top findings in the survey.

“People-development is critical to companies’ future success and ability to stay competitive. It is especially important in an environment of skilled labor shortage and increasing competition.” said Chris Daum, president of FMI Capital Advisors. “Firms need to have strategic and holistic processes in place for recruiting and retaining talent in order to stay viable today and in the future.”

The survey, taking insights from executives and employees of companies in the E&C industry, presents findings on various aspects of people development, including talent retaining, labor force structure and dynamics, standard processes and frameworks, measurements, succession plans and corresponding company development strategies. The survey examines the challenges and trends impacting the construction industry as well as identifies the training strategies that are now required to maximize performance and development.

Skilled Labor Shortage Grew Over 30 Percent

One of the leading findings is that skilled labor shortages are intensifying and broadly affecting construction firms. The survey shows 86% of respondents reported that their company was experiencing skilled labor shortages, compared with only 53% two years ago, a 30% increase in the gap. This situation stems from the structural mismatch of labor capabilities and employer demands, as well as the continuing fallout of the last recession. Moreover, the extent of labor shortages is probably more severe than expected and is starting to impact construction firms nationwide.

The survey also reveals an intriguing mismatch where employee engagement is concerned, especially among millennials. Employers surveyed cite offering competitive pay (89%), providing an enjoyable work environment (81%) and offering training opportunities (76%) as the top-three methods they use to retain key talent in the construction industry. Conversely, millennial employees list the top three important factors for keeping them engaged are competitive pay (29%), work-life balance (23%), and personal development (16%).

Other key findings include:

  • Companies in the construction industry lack processes to develop and promote high-performing employees
  • Executives and field manages are expected to have the highest attrition rates over the next five years
  • The majority of firms don’t connect training expenditures and performance management metrics
  • Annual performance reviews are a top priority for increasing employee performance and development
  • Having a defined and well-communicated vision is critical to retaining key talent, regardless of age.

Business Implications

The Talent Development Survey in the Construction Industry offers a roadmap for companies looking to strengthen existing people development programs and build out future talent-retaining strategies. Companies can benefit from developing a firm-wide vision that encourages culture and building project management and field supervision capacity. In the meantime, companies can invest in creating and implementing an effective performance management process.

Randy Nemchin, a senior consultant at FMI, presented the findings of the survey report at AGC Construction HR & Training Professionals Conference on October 9th, 2015. To download the full survey report, please go here.


Media Contacts

Yue Jiang
Peppercomm
(212) 931-6171
yjiang@peppercomm.com

Rebecca Esler
FMI
(919) 785-9209
REsler@fminet.com

Public E&C Firms Underperforming the Broader Market, According to FMI 2015 Issue 2 M&A Advisor

NEW YORK, NY, October 5, 2015 – Public E&C Firms Underperforming the Broader Market, According to FMI’s 2015 Issue 2 M&A Advisor.

Public E&C firms historically have outperformed the broader market during periods of expansion and underperformed during periods of contraction. However, this has not been the case for the E&C industry during the latest bull market. Between June 30, 2010 and June 30, 2015, the S&P 500 outpaced the growth of FMI’s contractor index by 61 percent. Over that time, the S&P 500 grew by over 100 percent; whereas, the median share price of the firms in FMI’s contractor index climbed less than 40 percent.

According to Chris Daum, president of FMI Capital Advisors, “a variety of circumstances have weighed on publicly traded E&C firms in recent years, including the inability to increase margins, weak foreign markets, anemic public funding, and a steep decline in oil prices. As a result, five years into a recovery, the E&C industry continues to trail the broader economy and may not reach pre-Great Recession levels before the next downturn.”

Click here to download Report


Media Contacts

Yue Jiang
Peppercomm
(212) 931-6171
yjiang@peppercomm.com

Rebecca Esler
FMI
(919) 785-9209
resler@fminet.com

FMI Revises 2015 Construction Growth Upward to 6 Percent Manufacturing, Lodging, Office, and Amusement and Recreation among Top Growing Sectors

NEW YORK, NY, September 24, 2015 – Construction activities are forecasted to grow at 6 percent through 2015, up from the previous forecast of 5 percent in Q2, according to the Q3 FMI Construction Outlook released today.

Construction growth is not only predicted to rise this year, but is also expected to climb to 7 percent, reaching $1.09 trillion in 2016, the highest total since 2008, unadjusted for inflation. However, as construction gets busier, productivity improvement becomes more of a challenge.

“Improvements in productivity will be critical for achieving growth and sustaining margins in the years ahead,” said Chris Daum, President and Senior Managing Director of FMI Capital Advisors, Inc. “We expect to see the use of new technologies and services expand, especially in highly competitive markets or where it has been difficult to find skilled workers.”

The Q3 FMI Construction Outlook forecasts growth for 17 sectors, across residential, non-residential and non-building groups. Manufacturing continues to be the fastest-growing construction sector this year at 18 percent, but other strong markets for 2015 include lodging, office, and amusement and recreation, all experiencing double-digit growth.

With an expected 8 percent drop this year, power construction is one sector that has cooled down in 2015. The power industry is in flux due to changing fuel supplies as well as variable rates of growth in alternative energy sources such as solar and wind.

Forecasts for some key sectors:

  • Manufacturing –Manufacturing is currently the fastest-growing construction sector at 18 percent for 2015. FMI expects that rate to slow in 2016 to just 5 percent. Continued low energy prices will hold down capacity growth in the oil and gas sector, but help spur expansion in other areas of manufacturing, extending the current boom in the petrochemical sector, in addition to other areas.
  • Lodging – Lodging construction continues a trend of rapid growth of 15 percent for 2015 and an expected rate of 12 percent for 2016 to $20.8 billion. The current pace is expected to slow to only 8 percent in 2017. Increased business travel and rising room rates are combining to bring this market back from overbuilt pre-recession levels.
  • Office – Construction has slowed since reaching 21 percent in 2014, but the current rate of 15 percent growth for 2015 continues to show that there is still steam in the office construction recovery. This growth is expected to carry over into 2016 and beyond, but at a slower rate. Continued growth in the technical sector and in larger metropolitan areas such as New York City will keep rents and absorption of new space high.
  • Residential – After three years of rapid growth, single-family and multifamily construction have cooled somewhat. Single-family construction is expected to end the year at 9 percent growth and multifamily is expected to realize 11 percent growth for 2015.
  • Power – After a strong year in 2014, power construction has slipped 8 percent in 2015 but is expected to regain 3% of that in 2016 to reach $96.7 billion. The power industry will continue to consolidate as the average consumer reduces power use, although demand will continue to grow due to population growth.

About FMI

FMI is the leading provider of management consulting, investment banking† and people development services 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, please visit http://hale.sg-host.com. Follow FMI on Twitter and LinkedIn.


Media Contacts

Yue Jiang
Peppercomm
(212) 931-6171
yjiang@peppercomm.com

Rebecca Esler
FMI
(919) 785-9209
REsler@fminet.com


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FMI’s Q3 Nonresidential Construction Index Shows Nonresidential Construction Sector Remains Optimistic Despite Drop in Overall Economy

NEW YORK, NY, August 19, 2015 – The nonresidential construction sector continues at a steady pace, a slight decline notwithstanding, according to the FMI Nonresidential Construction Index Report (NRCI) for Q3 2015.  The Index reflects the observations and sentiments of a sampling of construction industry executives nationwide.

FMI’s NRCI for Q3 2015 dropped 1.3 points to 63.6 from the previous reading of 64.9 in Q2. The index paints a mixed picture of the current state of the nonresidential construction sector. On one hand, the NRCI component for the overall economy dropped 6.3 points to 70.6 points this quarter. While down from its peak, this component still indicates that panelists contributing to the index remain bullish about the economy.  Similarly, indicators for the economies where panelists do the most business stood at 73.3, indicating a strong outlook despite a slight 3.4 points slip from last quarter.

“The construction industry continues to proceed on the recovery track, although it is showing signs of a minor deceleration,” said Chris Daum, president and senior managing director of investment banking at FMI. “Despite the decrease in projected backlog and the squeeze from rising material costs, executives in our industry are still bullish and hold positive outlooks overall.”

Highlights from the NRCI point to diverse forces driving the industry as we enter the last quarter of the year:

  • Panelists’ Construction Business.  Panelists’ views on their businesses are solidly positive with little changed from the last quarter.
  • Nonresidential Building Construction Market. Although the nonresidential building construction market where panelists do business slipped 1.4 points to 75.0, this NRCI component remains in the optimistic range.
  • Expected Change in Backlog.  The measure of expected change in backlog dropped 3.1 points this quarter to reach 68.8, while current backlog remains at a solid 10 months.
  • Cost of Construction Materials and Labor.  The cost of labor continues to rise, though not greatly changed from the last quarter, at 12.5. Materials costs continue to be high, but slightly lower than last quarter. Both labor and material costs act to hold down the overall NRCI as costs increase.
  • Productivity Low.  The productivity component stands at 47.6, the lowest since 2008. Executives surveyed report difficulties in maintaining productivity while squeezed by rising material and labor costs.

International Debt Impacts

The NRCI Q3report tallies executives’ opinions on the potential impact of the Greek debt crisis on their businesses. A third of respondents indicated no immediate or long-term impact was likely for their businesses, 25% were unsure and only 2% surveyed expected they would have to adjust their strategic plans to deal with the uncertain economy.

Business Changes Since Recession

All sectors within the construction industry continue their recovery since the financial crisis, with companies making numerous adjustments to their businesses in the intervening recession. The NRCI Q3 report summarizes how business adapted during the recession. Among the strategies employed, greater selectivity regarding projects and clients tops the list, followed closely by greater use of technology for their businesses to drive productivity, stronger risk management, heightened productivity, and incorporating global geopolitical and economic conditions in decision making.

Download the full NRCI Q3 2015 report here

Contact Rebecca Esler for reprint permission at 919.785.9209 or via email, REsler@fminet.com.

Construction Expected to Grow at Modest Rate across Key Sectors, According to FMI Corporation’s Q2 Construction Outlook

Construction activities are expected to grow at 5 percent in 2015, levelling off from the previous forecast of 8 percent in Q1 2015, according to the Q2 Construction Outlook released by FMI Corporation today.

Although the prediction is significantly lower than last quarter, the outlook reports the highest total for construction put in place since 2008.  “Construction spending continues to build on the rapid growth experienced in the industry last year,” said Chris Daum, senior managing director and president of Investment Banking at FMI Corporation.

The report provides forecasts for 17 sectors across residential, non-residential and non-building groups. Areas with strong growth forecasted include residential, manufacturing, commercial, amusement and recreation, office, lodging and transportation.

The sector with the highest growth prospect is manufacturing, which continues to show gains in construction activity despite several factors that point to slower growth for 2016 through the forecast horizon of 2019. That is partly due to the cyclical nature of industry as well as the sudden change in the value of the dollar affecting exports, among other factors.

With a negative 5% cut on the horizon, the sector with the biggest setback is power. The power industry is in flux due to changing fuel supplies using more natural gas and less coal as well as variable rates of growth in alternative energy sources like solar and wind.

Forecast for some of the key sectors:

  • Manufacturing — FMI expects another 17% growth for 2015, after seeing 15% growth in manufacturing construction in 2014, despite some ups and down in manufacturing activity. The manufacturing renaissance will continue to be susceptible to future energy prices and markets in the U.S. and abroad, and the double-digit growth is expected to slow to just 8% in 2016.
  • Commercial — Commercial construction is expected to grow at 13% in 2015 to $64,999 billion then slow to 7% growth in 2016. Consumers remain relatively confident about the economy, but they are also remaining conservative in their discretionary spending, at least until wage recovery improves.
  • Amusement and Recreation — Construction for the amusement and recreation sector grew sharply to 7% in 2014 with another 9% growth expected in 2015. Although continued growth in major sports stadiums supports this sector, there are a number of smaller towns and colleges improving their sports facilities. In the gaming sector, there are trends to rethink facilities for broader market appeal.
  • Office — Our office construction forecast for the second quarter calls for 11% growth in 2015. Although slower than the 19% growth seen in 2014, office construction is benefiting from the drop in unemployment levels.
  • Residential — FMI expects solid growth of 8% for 2015 and for that growth rate to remain steady through 2019. Multifamily construction continues in double-digit growth through 2016. Even though sales of new single-family homes grew to 517,000 in April, 26.1% above April 2014, many would-be homebuyers are holding off until their wages go up, and they can save enough money to meet new lending standards.
  • Power — FMI forecasts a sharp slowdown for 2015 of negative 5%, a dramatic slowdown from the 11% in 2014 that brought the sector put in place at $100.8 billion. Growth should again turn positive in 2016.
  • Religious — Religious construction continues to slow and is expected to be 5% under last quarter’s results. Areas of growth will likely be renovation, as newly formed congregations move into vacated retail space or reoccupy church buildings abandoned by other faiths.
  • Public Safety — Public safety is anticipated to continue to slow by 3% in 2015 after the decrease of 3% in 2014.  Although federal prison populations have recently decreased, the overall prison system is still overcrowded. Reviews of mandatory sentencing and early release programs may help decrease some crowding.

To download a copy of the current Construction Outlook, click here. To receive the report on a quarterly basis, please email outlook@fminet.com. Contact Rebecca Esler for reprint permission at 919.785.9209 or via email, REsler@fminet.com.

Nonresidential Construction Sector Continues on Growth Path Despite Labor Pinch And Rising Costs, According to Q2 FMI Nonresidential Construction Index

NEW YORK, NY, May 27, 2015 – The nonresidential construction sector continues to grow at a solid pace, reflecting 18 months of improving activity despite rising costs of construction materials and labor and a slight decline in regional economies where most construction activity is taking place, according to the FMI Nonresidential Construction Index Report (NRCI) for Q2 2015. The Index reflects the observations and sentiments of a sampling of construction industry executives nationwide.

FMI’s NRCI for Q2 2015 came in at 64.9, essentially unchanged from the previous reading of 64.8 in Q1.  The index paints a mixed picture of the current state of the nonresidential construction sector. On one hand, the NRCI component for the overall economy dropped 1.9 points to 76.9 points this quarter.

While down from its peak of 81.1 a year ago, this component still indicates that panelists contributing to the index remain bullish about the economy.  Similarly, indicators for the economies where panelists do the most business stood at 76.7, suggesting continued growth on a broad scale.

Business Improving Despite Rising Costs in 2015

Highlights from the NRCI point to diverse forces driving the industry as we enter the midpoint of the year:

  • Panelists’ Construction Business.  Panelists’ business is now improving with the overall economy indicating deeper, more sustainable growth.
  • Nonresidential Building Construction Market. The nonresidential building construction market where panelists do business is up 1.9 points to a solid 76.4. This NRCI component is in line with overall economic growth, auguring for continued health in the industry.
  • Expected Change in Backlog.  The measure of expected change in backlog improved 3.2 points this quarter to reach 71.7, while current backlog remains at a solid 10 months.
  • Cost of Construction Materials and Labor.  The index component for the cost of construction materials dropped one point to 21.4. The component drops as prices increase. The cost of labor components dropped sharply by 5.2 points to 12.5. Both labor and material cost increases reduce the overall NRCI score.
  • Productivity Flat.  The productivity component continues to hang around 50.0, or little improvement. It is currently at 51.0.
  • Green Construction. Owners’ views concerning “green construction” indicate that the most important factor characterizing the green construction category is lower energy costs. Only 17% of panelists have more than 50% of their projects in the “green” category.

“While the current and future outlook for nonresidential construction appears stable if relatively unchanged, things could become more dynamic,” said Phil Warner, Research Consultant for FMI. “In fact, improvements in profitability would happen faster if costs of materials and labor weren’t rising faster than construction pricing. There is also an increasing amount of evidence that more contractors are capacity-limited.”

Green Construction and Delivery Method Trends Active

Many panelists noted that green construction is now mainstream and considered more the norm than a fad. However, few owners are willing to pay more to build “green,” according to panelists. In 2008, NRCI panelists predicted that green construction would grow from just 13 percent of their then-current backlog to 38 percent in five years. A little over seven years later, panelists report that green construction makes up just 28.6 percent of their backlogs on average.

On the topic of construction delivery method trends, responses surrounding current and future trends for construction project delivery methods indicated a return to more collaborative methods. This indicates a shift toward alternative delivery methods and away from the more traditional approach of design-bid-build popular during the recession as a way to ensure the lowest initial price for projects.

However, the expected rate of change over the next three years suggests a slow transition from design-bid-build and CM at-Risk to more design-build and the newer concept of Integrated Project Delivery (IPD).

The FMI Nonresidential Construction Index Report (NRCI) for Q2 2015 report can be accessed here at http://hale.sg-host.com.  For reprint permission or to schedule an interview with the author, please contact Sarah Avallone at 919.785.9221 or savallone@fminet.com.

FMI Releases 2015 M&A Trends

NEW YORK, NY, May 6, 2015 – The impact of large, transformational deals by integrated engineers and constructors (E&C) last year will spur continued M&A activity this year, as the largest firms use acquisitions to drive growth and enter new markets, according to the latest edition of FMI’s Mergers & Acquisitions Trends.

“Large, transformational deals highlighted robust M&A activity in the E&C industry in 2014,” said Chris Daum, senior managing director and head of Investment Banking at FMI.  “While there may not be as many marquee transactions thus far in 2015, M&A activity remains very high, particularly among the largest U.S. and international firms that continue to pursue acquisitions as a conduit for growth and margin expansion.”

Buyers Competing for Quality Targets of Size

Large, integrated E&C firms remain acquisitive in 2015 as they look to expand beyond their current maturing markets. Competition among buyers for quality firms of size in attractive growth markets is leading to favorable valuations for sellers. One material challenge that exists for buyers has been the limited number of willing sellers that are of sufficient size to be attractive – e.g., heavy civil contracting firms above $200 million and utility T&D or multi-trade industrial firms above $100 million in value.

Four Persistent Themes in 2015

Four persistent themes are shaping broader trends within the industry:

  • 2014 was notable for several “mega-deals” in the E&C industry, with three deals accounting for more than $11 billion in transaction value alone. Several multibillion-dollar transactions, including AECOM’s acquisition of URS, SNC-Lavalin’s acquisition of Kentz and the merger of AMEC and Foster Wheeler, reflected the continuing convergence of engineering and construction, the pursuit of global scale by large firms and competition for “mega-projects,” which continue to proliferate.
  • Firms tied to public spending remain in a “holding pattern” until spending returns to normalized levels. Most of the new construction currently taking place is in the private sector due to a lack of public spending on infrastructure, and buyers have shifted their appetites toward companies servicing the more active private sectors. Potential sellers who are heavily tied to the public sector may attract limited buyer interest until the outlook for public infrastructure spending improves.
  • Interest from strategic buyers exceeds the number of quality, motivated sellers in several industry sectors, driven in part by strong interest from international buyers. The US is the most attractive growth market for international firms faced with flat or declining business in their home markets. International buyers are most interested in national or large regional general contractors, heavy civil contractors, or large specialty firms focused on power, energy and industrial infrastructure.

Varied Activity by Sector

The carryover of robust M&A activity from 2014 in the E&C industry is most notable among firms involved in the design, construction or maintenance of power, energy, utility and industrial infrastructure. However, building products, energy services and cleantech and specialty contractors with large service and maintenance operations continue to see increased buyer interest.

In Oil & Gas, many private equity firms pulled back from pending upstream and midstream deals in the second half of 2014. The sustained decline in the price of oil is expected to fuel an increase in distressed sales, a decline in valuation multiples and a re-emergence of strategic buyers in 2015. Those financial buyers who remain active in the market are focused on acquiring quality assets at steep discounts. The industrial sector, meanwhile, is growing faster than the overall construction market. For that reason, we expect M&A activity for industrial trade contractors to increase over the next few years. The surge in industrial projects is due to the recent availability of low natural gas prices. This has driven both new and renovation projects, spurring some contractors to look to M&A as a potential solution.

Robust International Activity

Many international buyers, meanwhile, who have historically focused on traditional construction firms, are beginning to shift their attention to integrated E&C firms. Many buyers believe the integrated model provides a significant entry point into the U.S. market for firms looking to make their initial acquisition. In addition, international buyers continue to see the U.S. as an opportunity for Public-Private Partnerships (P3) projects, and an integrated platform can provide earlier access to the development of revenue-generating projects.

“While 2015 may not match the level of activity seen in 2014, M&A remains a focal point of strategy for many large domestic E&C firms,” said Daum. “Coupling that with the increased interest from international buyers should allow for a continued robust M&A market in 2015.”


About FMI

FMI is the leading provider of management consulting, investment banking and leader development services to the engineering and construction industry. We work in all sectors 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, and 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, please visit http://hale.sg-host.com.  Follow FMI on Twitter and LinkedIn.

To download a copy of FMI’s M&A Trends, click here.  For reprint permission or to schedule an interview with the author, please contact Sarah Avallone at 919.785.9221 or SAvallone@fminet.com.

Sale of EnerPath to Lime Energy Co.

Lime Energy Co. (NASDAQ: LIME), a leading provider of energy services to utilities and their commercial customers, acquired EnerPath, a pioneer for over two decades in software solutions and program administration for utility energy efficiency programs.

This integration of two principal innovators in utility program delivery combines Lime Energy’s track record of delivering high participation in energy efficiency programs from small and mid-sized businesses (SMBs) with EnerPath’s industry-leading enterprise software that enables cost-effective delivery of energy services to a broad range of commercial and residential customer segments. With a combined resume, including provision of in-person customer engagement and energy education to millions of utility customers, the companies have delivered more than 100,000 commercial facility energy-efficiency projects reducing 1,000 gigawatt-hours of energy usage – enough to power 100,000 homes. EnerPath’s proprietary energy efficiency software platform has processed more than 1 million customer transactions under utility energy efficiency programs.

FMI Capital Advisors, Inc. acted as the exclusive financial advisor to EnerPath for this transaction.

About FMI Capital Advisors

FMI Capital Advisors is a leading Investment Bank serving the E&C and infrastructure industry. Our unique industry focus, serving a broad range of industry sub-sectors, enables us to provide our clients with valuable insight and advice. With over 600 completed transactions, FMI combines advisory expertise with industry-focused knowledge and relationships in order to achieve value for clients.

FMI Capital Advisor’s Energy Services & Cleantech Group provides M&A and capital formation services for companies in the energy services and cleantech industry, including those focused on:

  • Energy Efficiency
  • Solar, Wind, Biomass
  • Distributed Generation
  • Energy Procurement
  • Demand Response
  • Operations and Maintenance
  • Energy Management
  • Utility Demand Side Management
  • Power Quality and Reliability
  • Energy Storage
  • Other Renewables
  • Measurement and Verification

 

 

 

 

Construction Put In Place to Grow 8 Percent in 2015

RALEIGH, N.C. (March 24, 2015) — Total construction put in place for 2015 is predicted to grow 8 percent according to the latest report from FMI. This supports earlier FMI predictions that CPIP will top $1 trillion in 2015, something the market has not seen since 2008. This indicates that the economy is on track for a resilient recovery.

“The current growth cycle appears to be broad-based and sustainable,” says Randy Giggard, managing director of research services for FMI. “Most of the new construction activity is in the private sector. Projects dependent on government spending, especially those involving infrastructure, continue to be at the mercy of politics.”

Geographically, larger cities are experiencing strong construction growth due in part to increases in rents and declining inventory for housing and office space. The sectors expected to experience the highest growth rate are:

  • Lodging construction – 16 percent CPIP growth
  • Commercial construction – 15 CPIP growth
  • Manufacturing construction – 11 CPIP growth
  • Office construction – 11 CPIP growth
  • Residential construction – 9 percent CPIP growth

To download a copy of the current Construction Outlook, click here. To receive the report on a quarterly basis, please email outlook@fminet.com. Contact Sarah Avallone for reprint permission at 919.785.9221 or via email, savallone@fminet.com.

FMI Reports Rising Nonresidential Construction Index Comes with Struggles

NRCI = 64.8

RALEIGH, N.C. (February 19, 2015) – The Nonresidential Construction Index from FMI rose two points in Q1. This normally is a positive economic sign. However, construction companies are facing the challenge of having enough people to keep up with increasing backlogs, warns Phil Warner, researcher for FMI.

The engineering and construction executives that comprise the NRCI panel are strongly optimistic about both the economy and their businesses. The diffusion indexes for the overall economy and the geographic economies where individual panelists do business rose more than six points, reaching 78.

The report discusses owners’ views on expectations for 2015 Construction Put In Place, top business challenges for 2015 and employment trends. Lack of a skilled workforce was among the top concerns. Other comments express some political angst. One panelist expressing, “Need a federal highway bill!” A different panelist says, “Another challenge is the increasing regulatory burdens placed on our clients and in turn our business. Some projects are taking almost two years to clear local planning hurdles. By the time the project is approved, budgets are obsolete, and the project may not be feasible.”

To read the full report, click here to login and download a PDF. For reprint permission or to schedule an interview with the author, please contact Sarah Avallone at 919.785.9221 or savallone@fminet.com.

FMI Warns Craft Labor Shortage May Slow Construction

RALEIGH, N.C. (February 10, 2015) —Surveying members of the Construction Personnel Executives Group, FMI reports, “24 percent of respondents will be unable to bid more work and 32 percent will experience slow growth if their companies cannot reasonably meet the need for skilled labor and tradespeople.” Top executives at the largest contract firms in the U.S. took part in the survey.

“Overall, there’s an increase needed in skilled trade workers of more than 10 percent thoughout the next three to 10 years,” says Ken Wilson, director for FMI, citing highlights from survey partipants. One large construction company says, “Our current hiring forecast shows a need for 8,500 additional craft workers by 2017.”

The top five positions that are expected to be the most difficult to fill are:

  1. Operator (heavy equipment)
  2. Welder (boilermaker)
  3. Carpenter
  4. Pipefitter
  5. Ironworker (reinforcing)

There are two significant contributing factors to the high demand for craft labor:

  1. The shift of the construction workforce to oil and gas related construction. FMI estimates that by 2017 nearly 10 percent of the total U.S. construction workforce will be part of this burgeoning segment of the industry.
  2. The number of survey respondents that plan to increase the amount of work the company self-performs. Currently, surveyed firms self-perform less than 40 percent of construction projects. However, 65 percent either have plans to or are considering plans to increase self-performed projects.

This in-depth look into recruiting and retention of craft labor includes an analysis of the driving factors behind the skilled labor shortage, the most effective recruitment tactics and how companies are filling the demand for field management of the craft labor force. The report also provides practical counsel on how to develop human resource strategies to improve recruiting and retention rates.

To download a copy of the 2015 survey report, “Craft Labor Recruiting and Retention,” click here. For reprint permission or to arrange an interview with the authors, contact Sarah Avallone at 919.785.9221 or via email, savallone@fminet.com.

FMI Warns Valuation Errors May Lead to Lawsuits

DENVER, CO (January 8, 2015) – The Department of Labor has filed 28 lawsuits, recovering more than $241 million, against businesses offering employee-stock-ownership plans. Inaccurate company valuations are the primary cause. In the Q4 Mergers and Acquisitions Advisor report by FMI, Curt M. Young, managing director for FMI Capital Advisors, Inc., provides recommendations on how to avoid legal action by the DOL.

Young provides insight into what the DOL expects from ESOP Trustees in his review of a $5.25 million settlement with GreatBanc Trust Company in 2012. Specifically, GreatBanc failed to investigate an appraisal of Sierra Aluminum’s value allowing employees to purchase shares for more than fair market value. This resulted in a breach of fiduciary obligation under ERISA.

“A common practice of basing valuation on projected cash flow is speculative. It generally not be given much weight when valuing companies in highly cyclical industries, such as engineering and construction,” says Young. “Appraisers with industry experience place greater value on longer-term performance measures including the company’s management and competitiveness.”

Complementing Young’s article is “Building Value Through Acquisition” by Daniel T. Shumate, associate with FMI Capital Advisors, Inc. Shumate demonstrates how a strategy of acquiring businesses that poses rare, hard-to-imitate or imperfectly-mobile resource can improve the long-run economic performance of companies. Additional strategy and scenario planning techniques are covered in the report with an excerpt from “Visionaries: How today’s leaders are using future contingencies to plan strategically.”

To download a copy of the Q4 Mergers and Acquisitions Advisor, click here. For reprint permission or to schedule an interview, please contact Jenna Luvin at 303.398.7202 or Jluvin@fminet.com. Subscribe here to be emailed future copies of the Mergers and Acquisitions Advisor.


About FMI:
FMI is the leading provider of management consulting, investment banking* and people development services to the engineering and construction industry. FMI services 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 Evaluates Executive Pay Trends

RALEIGH, N.C. (December 19, 2014) — In the most recent white paper released by FMI today, author Mike Rose shares an analysis of executive pay trends for the engineering and construction industry from 2008 through 2013. Key takeaways include:

  • Long-term compensation and total compensation are heavily influenced by profitability and have seen the sharpest declines for the executive officers (CEO, CFO, COO and CAO).
  • Executive total compensation has declined about 8 percent.
  • Financial executives and business unit executives have seen the steepest declines in bonuses, reflecting the consolidation of executive power into the corporate suite and away from the business unit.
  • The largest gains in bonuses reflect an emphasis on cost control, as well as project management.

Annually, the firm conducts a series of compensation surveys covering approximately 280 positions for the engineering and construction industries. To download a copy of the “Executive Pay Trends” white paper, click here. For reprint permission or to schedule an interview with the author, please contact Sarah Avallone at 919.785.9221 or savallone@fminet.com.

FMI Evaluates Crude Oil Price Drops

HOUSTON (December 12, 2014) – “The demise of the shale revolution is greatly exaggerated,” cites FMI in an analysis of the U.S. oil market given the recent drops in crude oil pricing. In its Q4 Oil and Gas Advisor, FMI notes per rig, per day earnings in the Bakken oil basin, among others, are nearly double that of 2012.

Recently released, the report takes a closer look at the affect drilling efficiency is having on U.S. shale production. It also includes a look at M&A activity of energy-focused contractors and engineers. In the wake of several U.S. / Canadian transactions this year, FMI expects cross-border M&A to continue in 2015 and beyond. Two feature articles on construction risk management and margin growth round out the report.

To download a copy of the Q4 Oil and Gas Advisor, click here. For a free subscription to future reports, sign up here. To schedule an interview or for reprint permissions, please contact Jenna Luvin at 303.398.7202 or Jluvin@fminet.com.


About FMI:
FMI is the leading provider of management consulting, investment banking* and people development services to the engineering and construction industry. FMI services 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 $1,040 Billion in 2015

Firm Releases Annual U.S. Markets Construction Overview

RALEIGH, N.C. (December 3, 2014) — FMI, the leading provider of management consulting, investment banking* and people development services to the engineering and construction industry, announces the release of its 2015 U.S. Markets Construction Overview. Researchers at FMI predict 2014 will end with approximately 7 percent growth in construction put in place. This rate of growth is expected to continue with a total CPIP of $1,040 billion in 2015.

The overview consists of three major sections: a synopsis of the key trends in the energy market and their widespread impact on the construction industry, important issues facing industry sectors and a highly detailed economic forecast by industry sector.

A few highlights include:

  • The booming oil and gas industry in North America is driving growth in the industrial market, but could be draining talent and resources from other sectors.
  • Finding and retaining effective leaders, executives, craftsmen and workers remains a primary challenge as the marketplace seeks solutions through increased productivity, improved business practices and aggressive recruiting.
  • The need for succession planning and a pipeline of future leaders is becoming ever more vital as baby boomers retire in large numbers.
  • Funding for needed heavy civil projects will continue to be challenging, especially for many state and local governments.
  • Capital expenditures are rising in some regions while lagging in others, but measurable movement is happening.

FMI publishes the U.S. Markets Construction Overview annually. To purchase a copy, click here. For more information about FMI’s Overview, please contact Sarah Avallone at 919.785.9221 or via email at savallone@fminet.com.

In addition, each quarter FMI produces its Construction Outlook that supplements the Overview. If you would like to receive an electronic copy of the quarterly Construction Outlook, please email outlook@fminet.com.


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

FMI Executive Presents Keynote Address at Energy Construction Summit

HOUSTON (November 21, 2014) – Scott Duncan, vice president of FMI Capital Advisors, Inc.,* served as the keynote speaker to more than 250 attendees of the Energy Construction Summit Nov. 18 in Houston. The event brought together energy experts, oil and gas producers, pipeline owners, petrochemical giants, and prospective LNG exporters to discuss the needs of emerging energy-related mega-projects.

“The shale revolution may be well under way, but the major boost it will provide to the engineering and construction sector is only beginning,” stated Duncan. “To make full use of the nation’s energy abundance, there is unprecedented need for the development and construction of new energy infrastructure. We believe the growth in the U.S. energy market provides an enormous opportunity for the construction industry.”

Co-author of the FMI white paper “Skills Shortages in a Booming Market: The Big Oil and Gas Challenge,” Duncan has provided mergers and acquisitions, ownership transfer, and strategic advisory services for engineering and construction firms operating in energy and industrial markets. Prior to joining FMI, he managed corporate strategy, acquisitions and divestments for Lafarge SA’s business development group in the U.S. He has also prepared equity research on oil and gas exploration and production companies for a national investment firm.

For more information or to schedule an interview, please contact Jenna Luvin at 303.398.7202 or jluvin@fminet.com.


About FMI:
FMI is a leading provider of management consulting, investment banking* and research to the engineering and construction industry. FMI services 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 Slowly Rises

NRCI=62.8

RALEIGH, N.C. (November 20, 2013) – FMI, a leading provider of management consulting and investment banking* to the engineering and construction industry, announces the release of the 2014 Fourth Quarter Nonresidential Construction Index report. The NRCI shows a slight increase from 62.5 in the third quarter to 62.8 in the fourth quarter of 2014. This is nearly 5.5 points ahead of fourth quarter 2013. An NRCI greater than 50 indicates improvement or expansion.

There are many good reasons for optimism by NRCI survey respondents this quarter. The top-three are: businesses are starting to build again, backlogs are expanding and future business looks good with low inflation. A close fourth is a sense of financial security with improved balance sheets.

However, the costs of labor and materials are still on the rise, thus holding down the overall NRCI score. In addition, nearly one-fourth of the panelists expressed concern about the availability of skilled labor.

To download a copy of the full report, click here. For reprint permission or to schedule an interview with the author, please contact Sarah Vizard Avallone at 919.785.9221 or savallone@fminet.com.

FMI Releases 2014 Compensation Analysis

RALEIGH, N.C. (October 13, 2014) – In the most recent white paper released by FMI today, author Mike Rose shares an analysis of more than 75,000 salary records for calendar year 2013. Annually, the firm conducts a series compensation survey covering approximately 280 positions for the engineering and construction industries.

Key takeaways from the white paper titled “Post-Recession Transformations” include:

  • Professional pay indexes have increased more than 10 percent since 2008
  • Bonuses are down as much as 50 percent since 2008
  • The largest compensation increases for construction professionals have occurred in five job areas:
    • Business development – up 16 percent since 2009
    • Project accounting – up 15 percent since 2009
    • Quality Assurance – up 15 percent since 2009
    • Estimating – up 11 percent since 2009
    • Building Information Modeling staff – wages have risen 11 percent since 2009

To read the complete “Post-Recession Transformations” white paper click here. For reprint permission or to schedule an interview with the author, please contact Sarah Vizard Avallone at 919.785.9221 or savallone@fminet.com.