Energy and Related Sectors Buoy Design Firms
Continued strength in the energy industry propelled design firms in Texas and Louisiana last year, but it wasn't the region's only revenue-growth catalyst. The top 75 design firms on ENR Texas & Louisiana's ranking reported combined regional revenue of $4.1 billion in 2013—up from $2.97 billion in 2012—an increase of roughly 38% and more than double the nearly 16% growth of the year before.
"Upstream [oil and gas] activities are slightly declining due to decreased drilling activity, while midstream, downstream and power sectors have increased as the industry seeks to build out infrastructure," says Keith Manning, executive vice president of Zachry Holdings Inc. Regional revenue for the company, the magazine's Design Firm of the Year, rose to $98.7 million in 2013, putting it at No. 10 on this year's list.
Contributing to Zachry's strong performance was work on two large Texas projects—front-end engineering and design on the estimated $11-billion Freeport liquefied natural gas (LNG) export terminal in Freeport, Texas, and polyethylene facilities for Chevron Phillips Chemical Co. in Sweeny, Texas.
Meanwhile, unconventional shale plays continue to boom. "Older, established fields have seen a rebirth, and the Midland-Odessa area is hotter than ever," says Blake Jordan, senior vice president at Willbros Group Inc., a new addition to this year's ranking.
"Last month, some 44 rigs moved into North Texas and North Louisiana, so we are seeing a slight resurgence there as well," he says. "We are also seeing a need for pipeline integrity and maintenance engineering."
Willbros, which was ranked No. 3 with revenue of $193.4 million last year, has opened permanent offices in Midland and San Antonio. "As additional LNG export facilities are permitted, we feel that we will continue to see large diameter projects in Texas and Louisiana," Jordan says. "Activity across both states will continue to stress existing civil and electrical infrastructure, so we should expect to see a build-out of powerplants, power lines, water and road projects."
Growth Across Markets
It's not just energy that's faring well. "We're seeing great opportunities in every market sector, particularly in mixed-use, hospitality, health and wellness and corporate campuses," says David Calkins, regional managing principal at Gensler. "We are also seeing renewed interest in suburban and urban mixed-use infill projects." Texas and Louisiana are attracting corporate relocations as firms are drawn to the low cost of living, favorable tax structure, research and education institutions and a qualified talent pool, he adds.
Gensler maintained its sixth-place ranking as regional revenue increased by $9 million in 2013 to $120.8 million.
"We are designing [many] hospitality projects, [with] much of that activity in Texas and Louisiana," Calkins says. "We are also designing new headquarters campuses; high density, mixed-use projects; health and wellness centers; and education projects."