Southeast Contractors Finally See Revenue Increases
Numerous construction markets began to show signs of rebirth during 2011, and a considerable number of opportunistic and well-positioned Southeast contractors were able to start clawing back revenue previously lost during the recession. But it wasn't all good news, as ENR Southeast's annual Top Contractors ranking also reveals that while the seeds of recovery may have been sown for some in the past year, a broad-based resurgence remains elusive.
The results from this year's ranking reflects the continuing up-and-down nature of today's Southeast construction market. First, participation in the magazine's annual survey declined again, with only 91 firms responding this year—slightly more than half the 175 firms that were ranked just three years ago.
On the plus side, despite the lower number of firms, this year's collective regional revenue total—from projects located in Florida, Georgia and the Carolinas—actually edged up, to roughly $16.3 billion from $16.1 billion a year ago. That pushed up the average revenue figure to approximately $179.25 million from $153.6 million a year ago.
And that overall increase in business is reflected throughout the survey, starting at the top. Of this year's 10 highest-ranked contractors, six posted revenue gains compared with a year ago. Top-ranked KBR—formerly BE&K Building Group—reported a 44% uptick in regional revenue, to this year's highest total, $987.3 million, from $683.7 million a year ago.
KBR wasn't alone, though. Many firms up and down this year's ranking reported significant growth in revenue on a percentage basis, including Skanska USA, 18%; The Whiting-Turner Contracting Co., 80%; Hunt Construction Group, 31%; Barnhill Contracting Co., 16%; Hardin Construction Co., 86%; and M.B. Kahn Construction Co., 35%.
Cautious Optimism for Recovery Grows
The improving numbers are having an impact on contractor psyches. ENR Southeast's Top Contractors ranking has indicated a regionally declining market for several years now, and the latest signs of life are finally lifting the mood.
Overall, numerous contractors are starting to expect the upturn that began in 2011 to continue through 2012 and beyond.
Ray Riddle, vice president with Holder Construction Co., Atlanta, says there is a "steady stream of opportunities, probably at a higher pace than a year ago."
In Charlotte, N.C., Frank Blythe, vice president of Blythe Development, is even more upbeat. "The current volume and pace of business is up from last year," he says. "The volume of projects to bid has increased dramatically. And I think future business opportunities will continue to increase due to signs of life in private-sector construction.
"No markets are in decline," adds Blythe. That was not the case a year ago.
"There are many more opportunities in the multi-family rental housing, retail and hospitality markets than there were a year ago," Barrow says, adding that he's even seen opportunities in the previously moribund office market. "We expect the opportunities to continue to increase," he adds.
Despite the optimism, recovery remains spotty. Some markets are healthy, while others continue to languish.
The volume of medical and university work in the Southeast continues "to show positive trends," says William Leathers, senior vice president in the Orlando office of ValleyCrest Landscape Development.
Private-sector projects remain hit and miss, too. On a positive note, the Southeast should continue to see more data center work, perhaps most notably represented by the estimated $1-billion facility that Apple recently completed in Maiden, N.C.