Construction in the Southwest continues at a healthy pace.

With Sandia National Laboratory’s announcement of $135 million in construction projects, a slew of high-profile medical projects in Arizona and road and hospitality projects stirring in Las Vegas, activity is humming.

According to the annual Top Contractors survey, the top 10 firms posted combined revenue of $3.4 billion in 2016 from work performed in the Southwest. That’s a nearly $300 million increase from 2015. Revenue from all of the firms participating in the survey rose to $6.79 billion in 2016, up from $6.46 billion in 2015, also an increase of $300 million.

Last year’s gains among the top 10 saw revenue increase by a much smaller $30 million. The increase in revenue has amplified the shortage of trained workers, which continues to challenge contractors, says Ryan Abbott, senior vice president and Southwest district manager at Sundt Construction.

ENR Southwest 2017 Top Contractors

“The Southwest construction ‘ecology’ has grown exponentially over the last 16 months carrying with it all of the challenges of labor and supply-chain adaptation,” he says.

More specifically, Abbott adds, the financial side of construction will take even more attention.

“Other challenges include realigning lending, surety and insurance market inputs with public private partnership delivery. Even greater war chests will be needed to pursue solution-based project procurement processes,” he says.

Across the region and specifically in New Mexico, owners are mindful of their investments in the community. Sandia’s $135 million in construction investment went exclusively to New Mexico firms, all but two of which are small businesses.

“These construction partnership agreements demonstrate and reinforce our commitment to New Mexico’s small business community,” says Krista Smith, senior manager of Sandia’s procurement operations department.

Regardless of the area of the Southwest, staying lean and finding innovative ways to get costs down will continue to win the day, says Todd Ostransky, general manager, Southwest division at Graycor Construction Co. He adds that remaining nimble and open to new ideas provides paths for even greater efficiencies.

“Prefabrication is another way that teams are exploring to manage labor costs and raw material planning. While delivery of prefab items can range from fully built rooms to implementation by select trades, the reality is prefabrication can deliver immediate cost and schedule benefits,” he says.