The Building Tradesman Newspaper

Friday, June 09, 2006

News Briefs

By The Building Tradesman

ENR ranks nation's top contractors
The largest Michigan-based construction contractors generally held their position, or slipped somewhat, in an annual ranking of the nation's contractors based on year-to-year revenues.

The fact that the bottom has not fallen out on Michigan's big general contractors is an encouraging sign - given the current generally sluggish nature of our state's construction economy vs. the rest of the nation.

Published by the Engineering News-Record, the rankings showed that Michigan's two largest general contractors moved only slightly in their spots from 2005 to 2006 in the top 100. Southfield-based Barton-Malow dropped from No. 35 in 2005 to No. 37 in 2006, while Detroit-based Walbridge-Aldinger slipped from No. 34 to 43 this year.

"For many, if not most, large general contractors, this is a time like few have ever seen," the ENR article said. "The economy is strong, the markets vibrant, and there is more than enough work to go around in most major markets and geographic regions. What soft spots that can be found are not catastrophic."

Among the ENR's top 400 contractors, nine are Michigan-based. Here are the rankings of the other seven, and where they moved on the list compared to their standing a year ago: Angelo Iafrate of Warren (#135, +2); Rockford, Grand Rapids (#181, +27); The Christman Co., Lansing (#182, -31); Granger Construction, Lansing (#275, -6); George W. Auch, Pontiac (#286, +3); John M. Olsen, St. Clair Shores (#294, -40), and Roncelli, Sterling Heights (#308, -30).

Out-of-state contractors that are familiar to the Michigan construction community include Boldt (#69, +16); Miron, (#130, -7); the Clark Group, (#12, -3); the Washington Group (#13, -3) and Alberici (#39, +21).

The top three contractors in the nation are Bechtel, Centex and Flour.

The ENR said the Top 400 contractors posted a combined revenue of $235.56 billion for 2005, a strong 12.3% increase above 2004 earnings.

Good jump for 2006 construction
The value of new U.S. construction starts increased 4% in April to an annual rate of $688.7 billion, according to May 30 report by McGraw-Hill Construction.

Moderate gains were reported for nonresidential building and nonbuilding construction (public works and electric utilities), while residential building showed more modest growth.

Through the first four months of 2006, total construction on an unadjusted basis
came in at $210.5 billion, up 8% relative to last year's January-April period. By region, the Midwest was up 5 percent.

"The current year is seeing a shift in the source of expansion for construction activity,"
stated Robert A. Murray, vice president of economic affairs for McGraw-Hill. "Single-family housing had been providing the upward push for much of the past five years, but now it's
beginning to lose momentum. Nonresidential building in 2006 has picked up the slack, as stronger fundamentals such as improved occupancies and rents are outweighing any dampening arising from higher materials costs. In addition, the public works sector is being boosted by enhanced transportation funding, and the volume of new power plant construction appears to be turning upward after a lengthy decline."