Despite an overall rise in combined revenue among the region's top design firms, executives continue to take a cautious view of the market. The top 75 design firms in Texas and Louisiana saw regional revenue hit a combined $2.97 billion last year, up from $2.57 billion in 2011—a nearly 16% increase. Notably, the top three firms in this year's ranking all performed a significant amount of work in the transportation sector, which has been robust in recent years.
"It's a stable to strong market," says Todd Papes, senior vice president with AECOM's Gulf Coast district office in Houston. Second in this year's ranking of the largest design firms, the firm generated $136.72 million regionally last year with 46% of that revenue from transportation projects. The firm's largest project to break ground last year was a $54.4-million streetcar rail expansion in New Orleans, on which AECOM performed the final engineering.
HDR, which saw roughly one-third of its 2012 regional revenue come from transportation work, once again earned the top spot in our ranking. The firm ranked first overall despite the fact that its regional revenue dropped from $184.52 million in 2011 to $167.64 million in 2012. Among its major projects is the $1.2-billion Interstate 35 design-build project, which it is executing in a 50-50 joint venture with PTG.
"The transportation market is the strongest it's been in several years," says Ramon Miguez, northern Texas department manager for HDR.
Similarly, HNTB remained near the top of the list in third place with $129.72 million in 2012 regional revenue. Its local work includes the $107-million US 290 Segment J1 in Houston, which broke ground last year. With $104.35 million in 2012 revenue just from transportation, the firm is the region's top-ranked transportation engineering firm.
Atkins saw a big rise in regional revenue in the transportation sector, increasing from $49.67 million in 2011 to $61.56 million last year. And the firm could see expanded opportunities in the future. In May, the Texas Dept. of Transportation selected Atkins as program management consultant to assist its Strategic Projects Division and its 25 districts. Under the contract, Atkins will coordinate and oversee engineering, design, survey, utility relocation and right-of-way acquisition projects carried out under TXDOT's design-build contracts and comprehensive development agreements.
A Strong Power Market
The booming oil and gas sector helped significantly boost 2012 revenue. Several firms focusing on that market weren't listed in last year's ranking but appeared this year, including UniversalPegasus International, Houston; Surveying and Mapping, Austin; Eagleton Engineering, Houston; and Keystone Engineering, Mandeville, La.
Keystone Engineering expects continued growth, though challenges exist due to an especially tight labor market, says COO Barry Reed. Since 2010, Keystone's revenue has more than doubled from $16.4 to $36.6 million in 2012; it was ranked No. 31 this year.
Last year, the company's biggest job was a $40-million condensate stabilization project in the Eagle Ford shale formation in South Texas. The company sees ongoing growth in the region's shale oil developments fueling a variety of projects, says Daniel Cantrell, general manager of the firm's Houston office. "We also expect renewed activity in the chemical manufacturing sector due to the low price of natural gas," he adds.
Although shale gas is often the focus of new opportunities in the region, Cantrell notes that strong activity remains offshore in the Gulf of Mexico. "It's not a one-dimensional market," he says.
Some firms aren't focused entirely on oil and gas but are benefitting from that expertise. Jude Comeaux is vice president of business development for one such firm, T. Baker Smith of Lafayette, La., which lists energy, pipeline and industrial among its growing sectors.