Another specialty contractor recording an uptick in business is California Drywall, San Jose. Its revenue posted a modest 2% gain last year to $50 million, from $49 million in 2009.
The 65-year-old firm diversified its markets to include fireproofing and lath and plaster, says Greg Eckstrom, vice president. “We started to diversify prior to the market downturn and have worked hard to build these segments during the past few years,” Eckstrom says.
“We continue to look at further diversification, both in market segments and geographic markets, if it makes sense and is a logical extension of our core capabilities,” he adds.
Eckstrom also notes that California Drywall is taking advantage of a brighter commercial construction picture in Northern California, where a handful of large technology firms have expansion plans.
The public-sector segment is another story, however. Eckstrom says California's state budget crisis and a squeeze on federal spending will have an impact, especially on state-funded University of California and California State University projects.
But Eckstrom says health care continues to be a strong category and opportunities in other segments are emerging.
He says, “With large projects like the Apple, Salesforce, VMWare, Netflix and Facebook campuses under way or on the boards, and Google's continued growth, numerous 100,000-sq-ft-plus leases in the market, the re-emergence of high-density/high-rise residential [rental] projects, combined with developers building new core and shell projects, we think the commercial segment will remain steady and possibly grow over the next year.”
Southland Industries, an Irvine-based mechanical engineering firm, moved up to eighth this year, from 10th, and is seeing some backlogged projects finally getting a go-ahead.
Joseph Cvetas, executive vice president, says that as far as preconstruction costs are concerned, these extended “gestation” periods are “getting expensive.”
He says California's promising construction sectors include health care, higher education, prisons, life sciences and data centers, as well as a number of large, high-technology office campuses.