Backlogs Help Contractors Hold Steady in Difficult Economy
The 10 leading companies on ENR California's 2012 Top Contractors list collectively had a strong year, reporting a 15% gain in their Golden State revenue in 2011. But in general, most contractors saw business hold relatively steady, posting small revenue upticks or declines compared with their 2010 results.
As they look at 2012 and beyond, California contractors are starting to see brighter business signals on the horizon. In particular, they are spotting signs of life in the technology-driven commercial office and residential markets, both in the San Francisco Bay Area and in Los Angeles.
There was a shift at the very top of this year's list. McCarthy Building Cos. Inc., Newport Beach, moved up to the No. 1 spot from second place last year, although the company's revenue dipped 0.1% to $1.36 billion.
Last year's first-place contractor, Turner Construction Co., slipped to No. 2, as its revenue dropped 17.8% to a still-substantial $1.14 billion.
Hunt Construction Group has been rising fast in the ranking. The Scottsdale, Ariz.-based contractor, which has offices in San Francisco and Irvine, recorded $251 million in revenue in 2011 and vaulted to No. 21 on the latest list from 59th two years earlier. One factor behind Hunt's move up in the ranking was its work in the health care market.
For its part, McCarthy is finally seeing new opportunities in the commercial sector in the state, says Randy Highland, president of the company's California region. "Many developers are calling and asking for budgets for their prospective projects, evaluating the financial feasibility of programs they had on hold for the past few years," Highland says. "Many clients are taking advantage of the current market conditions to their benefit."
Noting that the firm's 2011 California revenue was flat, Highland says that's a fortunate result, given the current economy.