Perini has the added challenge of finding jobs with high enough margins to justify pursuing the work. “As a public company, we aren't in business for cash flow,” Rizzo says. “We are in business to make money for our stockholders.”
A few firms managed to defy the odds and post impressive gains in 2010. M.A. Mortenson Co.'s Phoenix office more than doubled its revenue to $188.9 million in 2010 through projects like the 270,000-sq-ft Health and Learning Center for Northern Arizona University and Salt River Fields, a new baseball spring training facility in Scottsdale. The sports/recreation category as a whole was one of the few in the Southwest to see improvement in 2010, gaining nearly 31% over the previous year.
“Looking ahead, we are forecasting a slowdown in new work based on the market's challenged ability to free up capital to either start or sustain projects,” says Ron Wilson, Mortenson's general manager. “Our focus will be on finding the right work and supporting our team members' personal growth and development.”
Hensel Phelps Construction's Phoenix office (a finalist for ENR Southwest's 2011 Contractor of the Year award) saw a 72% increase in revenue in 2010, buoyed by a $330-million PHX Sky Train contract at the Phoenix airport. The firm also landed the $110-million Arizona Cancer Center at the Phoenix Biomedical Campus, scheduled to start later this year.
As a result of diversification and its expertise in the highly regulated mining, industrial and aviation sectors, Phoenix-based CSW Contractors moved up 20 spots from last year. “CSW went through the same trials and tribulations many firms did when the recession first hit,” says CEO Robert Meyers. “Today, we are proactive in recognizing market changes, and that offers us the best opportunity to service not only the needs of our clients, but of our own employees as well.”
With residential construction a shadow of what it once was, firms like Kitchell have found innovative ways to readjust their market focus. “The 17-person division, formerly known as Kitchell's master-planned division, is now the renewable energy division and targeting work coming to the region,” Swanson says. Kitchell made the change after it performed site grading, drainage and fencing for the 280-MW Solana Solar Plant in Gila Bend, Ariz.
Solar is also paying off for Tempe-based McCarthy Building Cos. after the firm made a significant investment in the renewables sector three years ago, says Bo Calbert, Southwest division president.
“Our clients are relying on us to act more as a leader for them on the projects that we are undertaking,” Calbert says. “Having the technology to collaborate through [business information modeling] is a competitive advantage for us, and desirable to owners.”
Heavy/civil contractor Achen Gardner Construction has also been investing in technology since before the recession began, allowing a paperless approach to inputting and managing labor, equipment, material and subcontractor resources, says Daniel J. Spitza, vice president with the firm's Chandler, Ariz., office.
“The economy has forced public agencies to downsize, and we are using this period to not only diversify and refine our technical and management tools but to acquire and educate new professionals to prepare for the uptick that is on the horizon,” Spitza says.
“We know our firm's experience and qualifications will become an invaluable asset to agencies wanting to accelerate their programs in the future,” Spitza adds.