Ample Bookings Prepare Contractors for a Strong 2014
The oil and gas boom coupled with an improved economy and a better financing environment boosted contractor bookings last year in Texas and Louisiana, and could serve as a launching pad for revenue spikes in 2014. Combined revenue of the Top 10 firms in the ENR Texas & Louisiana annual Top Contractors survey reached $9.84 billion in 2012—the highest since the recession took hold. The results reverse a downward trend among the top firms in which revenue fell from $9.4 billion in 2009 to $8.3 billion in 2011.
Petrochemical projects played heavily into this year's ranking. Turner Industries Group, Baton Rouge, retained its top spot, tallying more than $2 billion in revenue in Texas and Louisiana in 2012. Fort Worth-based Kiewit, which gleans more than half its revenue from petroleum and industrial work, ranked second with $1.37 billion in regional revenue. S&B Engineers and Constructors, Houston, jumped to No. 4 from No. 13 last year, with $1 billion in local oil-and-gas projects.
General Building Uptick
While petrochemical work fueled the largest firms, several general building firms saw notable improvements in 2012 as well. With $536 million in revenue, Manhattan Construction, Houston, saw its best results in three years, climbing to No. 10 this year from No. 22 last year. The company can credit some major projects, including its joint venture portion of an $800-million contract in the Dallas/Fort Worth International Airport Terminal Renewal & Improvement Program. The contract scope includes improvements to terminals B and E. Last year, the company also completed the $228-million L'Auberge Casino & Hotel in Baton Rouge and the George Bush Presidential Center in University Park, Texas.
Steady stadium work has also been a major contributor to Manhattan's results. In Houston, the firm last year completed the $60-million LEED-Silver-certified BBVA Compass Stadium and broke ground on a $85-million facility at the University of Houston. Currently, the firm is in preconstruction on the $375-million Texas A&M University Kyle Field Redevelopment project in a joint venture with Vaughn Construction.
Perhaps even more promising, according to Bob Jack, Manhattan senior vice president, is that more private developer-driven opportunities are moving ahead, including speculative office projects. "There's a resurgence of commercial construction that we haven't seen for some time," he says. "In Houston and Dallas, there has been a uptick of office building work for developers and clients. That's a pleasant surprise and important to our company."
As a result, Jack says Manhattan is landing work in 2013 that will hit the books next year. "This year will be steady [compared with] last year, but there have been significant bookings that will cash flow in 2014," he says. "That will be a strong year."
Turner Construction Cos. also is seeing its recent investments in Texas begin to pay off. The firm recorded $500 million in local revenue in 2012—the highest since before the recession. Mike Kaiman, vice president of Turner Construction, says the company invested in building up its Austin and San Antonio operations during the downturn so that it would be prepared for post-recession opportunities. As a result, it landed work on several projects in those markets, including the new U.S. Dept. of Veterans Affairs Outpatient Center in Austin, which was completed in the spring. Turner also is doing several technology projects for such clients as CPS Energy in San Antonio.
This year, the company inked deals for the new San Antonio International Airport consolidated rental car facility as well as a construction manager at-risk contract for six projects for the San Antonio Independent School District.
"Normally, it wouldn't seem like the right move to make during a recession, but we made investments and developed relationships that helped improve our revenue lines for 2012 and 2013," he says. "We wanted to get a foothold before projects came out, and we hit the market at just the right time."