Top Specialty Contractors in Texas & Louisiana
The impact of the economic downturn is easing for specialty contractors in Texas and Louisiana as the region experiences the beginnings of a comeback. The changing marketplace in this transition year is shifting how these companies are doing business.
"Since 2009, when the world got turned upside down and shaken out, the market has changed in the way our customers look at the end-users," says Pete Wallace, chief operating officer at Team Industrial. "They're putting a lot more emphasis on labor buildups and cost buildups than they have in the past. Even though margins are back for our customers, they still put a lot of pressure on the contractors. As times get better, those pressures will come off, but [clients are]still fresh from the procedures and processes they put in place ... to hold back costs on contractors."
Nonetheless, Team Industrial saw a significant turnaround on project work in Louisiana and Texas, and that is continuing. The company was a new addition to this year's ranking, reporting regional revenue of $140.65 million in 2011. "I wouldn't call it a boom, but it's a positive trend," Wallace says.
Markets and Opportunities
The past year has been "a bit of a mixed bag," says Bruce Beard, president of The Newtron Group, an industrial electrical instrumentation company that saw its regional revenue stay relatively flat, dipping around $3 million to $197 million.
"But we do see a particular uptick in the market almost across the board in Texas and Louisiana," he adds.
Delayed work that's finally moving forward seems to be helping, but beyond that Beard sees this new rise as just part of the cycle "because there's been nothing that is particularly driving it."
Much of Newtron's work in the region stems from the refining and petrochemical industries, which remain one of the biggest drivers for construction work. Newtron recently completed some major refining upgrades in the Port Arthur, Texas, area, Beard notes.
But increased optimism about today's markets doesn't appear to be reflected in the overall financial picture of the Top Specialty Contractors survey this year. Regional revenue in 2011 for the top 10 companies, mostly specializing in mechanical and electrical work, was dramatically lower than in the prior year—averaging $274.07 million, compared with $309.9 million on last year's list.
The Gulf region has seen a rise in new development, particularly with the glut of oil and gas companies in the area for whom business is up.
"When the oil and gas industry is active, construction is also active," says Mike Syzdek, president of the Houston office of Baker Triangle.
The firm's largest project this year, its $8.72-million contract on the University of Texas Southwestern Medical Center in Dallas, helped push its regional revenue to $97.64 million. But that is down from $116.99 million in the prior year.