Large specialty contractors experienced greater gains than small to mid-size firms as the region's construction industry negotiated its road to recovery last year.

Photo Courtesy of Barton Malow Co.
Firms may have difficulty attracting labor now that markets are improving.

With few exceptions, the region's top 20 specialty contractors either matched or surpassed the revenue they posted in 2012, according to ENR Midwest's annual Top Specialty Contractors survey. Firms that followed the frontrunners encountered a slippier slope, the possible result of a growing technological gap between large and small firms, particularly in the areas of prefabrication and modeling, says Anirban Basu, chief economist with Washington, D.C.-based Associated Builders and Contractors.

Smaller firms also may have more difficulty attracting qualified labor, adds Ken Simonson, chief economist with Arlington, Va.-based Associated General Contractors of America. "It's hard to get labor back in the game when it's still harboring memories of seven years without work or a pay raise."

Labor's prospects remain spotty overall. Basu predicts growth in the Midwest region will mirror that of the nation this year—about 7%—but says both must contend with a sluggish public sector. "With the exception of Texas, North Dakota and a handful of other states, infrastructure spending has come to a standstill," he says. "In the majority of cases, federal support for those projects is waning."

Due to dwindling state revenue, transportation projects also are vulnerable unless Congress develops long-term solutions to fund them, Simonson notes.