The Building Tradesman Newspaper

Friday, June 01, 2018

Construction contractors are fat and happy, ENR says

By The Building Tradesman



It's a good time to be a construction contractor, both in Michigan and across the nation.

This was confirmed by the May 16 release of the annual Engineering News Record's "Top 400" contractor list, which ranks large contractors by revenue during the previous year. 

"The construction market is cyclical,"  the ENR said. "Executives at large U.S. contractors understand this and also understand that the current booming market will not last forever. However, despite the fact that this is one of the longest domestic upswings on record, few see signs that it will abate any time soon. So they are working hard now to take advantage of the opportunities available without losing sight of what the future may bring."

The ENR said the Top 400 contractors, as a group, generated a record $373.98 billion in contracting revenue in 2017, an increase of 2.1 percent from 2016’s $366.41 billion. The publication cautioned that contracting revenue from projects outside the  U.S. plunged 18.4 percent, to $35.55 billion, in 2017, with major declines noted in projects in the mining-and-metals and petroleum sectors and a falloff in the general building sector abroad.

For Michigan's top contractors, with some exceptions, many improved their financial position in 2017 and their place on the ENR list, reflecting the state's recent consistent ranking as a top construction market.  

For decades, Barton Malow (Southfield) and Walbridge (Detroit) have been the top two construction contractors in Michigan, and that didn't change. Barton Malow (No. 28) improved one position compared to the year before, while Walbridge (No. 48) climbed two spots. 

Other Michigan-based contractors on the Top 400 list (and their position compared to last year) on the list includes: Christman Co., Lansing (No. 110, +12); Commercial Contracting Group, Auburn Hills (No. 181, +78); Aristeo Construction, Livonia (No. 189, +16); Granger Construction, Lansing (No. 202, +117); Rockford Construction, Grand Rapids (No. 250, -84); Pioneer Construction, Grand Rapids (No. 273, -68); Wieland, Lansing (No. 276, -15); Roncelli Inc., Sterling Hts. (No. 290, +31), and Ideal Contracting, Detroit (No. 293, not on the list last year).

Notable contractors that didn't make this year's list, but did last year, including Clark Construction, Lansing (No. 338); Sachse Construction, Detroit (No 393) and George W. Auch, Pontiac (No. 394).

The top five U.S. contractors were Bechtel (San Francisco), Fluor (Irving, Texas), The Turner Corp. (N.Y.); Aecom (Los Angeles) and Kiewit Corp. (Omaha).

The other cautionary note for a busy construction industry delivered by the ENR: "The market is strong and growing steadily, but contractors worry that the work may outstrip the industry’s capacity to deliver due to workforce shortages and materials supply delays in the wake of tariffs."

A few other nuggets from the ENR's annual look at the U.S. construction industry:

*"One surprising element in the domestic contracting market is the high level of competition. Despite the amount of opportunities available, many contractors complain that the competition has not slacked off."

*"Many contractors are using the steady growth in the overall market to focus on what they do best, rather than scrambling for any opportunities that come along."

*Competition among contractors is robust: "One surprising element in the domestic contracting market is the high level of competition. Despite the amount of opportunities available, many contractors complain that the competition has not slacked off."

*"Demand for manpower and resources is outstripping capacity across the board, especially on complex projects. This shortage has led to an escalation in wages. It also has led to a struggle for contractors to recruit and retain qualified people."