Subcontractors Post Impressive Gains in Revenue
Construction is back on track for many, but not all, California specialty contractors, according to a recently conducted ENR California-McGraw Hill Dodge Analytics survey. The top 40 firms participating in the survey reported $5.65 billion in total 2012 revenue. That's up 42% from the $3.97 billion that the same number of companies reported in 2011.
"Construction is looking up," says Larry Hollis, vice president of business development with San Jose-based Rosendin Electric, which saw its 2012 revenue climb 32%, to $422 million. The San Francisco Bay Area is especially active, he notes.
Electrical contractors did particularly well. As a group, their revenue climbed 67% in 2012. In addition, six of the top seven firms on ENR California's overall specialty contractors ranking get all or part of their revenue from electrical work.
Most electrical contractors continue to be optimistic about future business. "For the next 18 months or so, the California outlook appears to be positive," says John Boncher, CEO of Cupertino Electric, San Jose. "In California, some of our largest projects are solar projects in the Central Valley, public works projects in Southern California and commercial campus work in and around Silicon Valley."
Many subcontractors in the state are benefiting from an upturn in private office development by technology, social media and biopharmaceutical firms. In particular, work in Santa Clara County is expected to continue to accelerate because of new campuses being built for Apple, Google and Facebook, Rosendin's Hollis says.
George Chrisman, vice president with Walters & Wolf, Fremont, says a trend toward more collaborative workspaces is propelling demand for office buildings with new amenities. "These companies are competing with each other for talent and are using their facilities to differentiate themselves in the market," he says.
Major sports projects also have contributed to subcontractors' coffers. In Northern California, construction on the new home for the San Francisco 49ers, the $1.3-billion Levi's Stadium in Santa Clara, has passed the 50-yard line. Arenas for the Golden State Warriors and Sacramento Kings are slated to get under way next year.
In Southern California, the $100-million renovation of Dodger Stadium, completed in March, helped Tustin-based Largo Concrete ring up $139 million in 2012 revenue, more than double its 2011 total. "We are very pleased with the strong rebound," says Ken Long, Tustin's president. "In addition, we are up again and are forecasting $205 million in revenue for the current year."