Natural Gas Helps Firms in Texas, Louisiana to Keep Rising
First comes natural gas, then the infrastructure needed to support it. That's a formula that has meant growth for the Texas and Louisiana construction industry over the past few years. The end result is continuing strength for the region's specialty contractors.
This year's ENR survey of Texas and Louisiana's Top Specialty Contractors drew 98 responses. Firms reported more than $7.425 billion in regional revenue across both states. That's a gain of nearly $300 million over the top 98 firms in last year's ranking.
Five of the top 10 firms in this year's ranking are electrical contractors, with mechanical and concrete firms rounding out the list.
"The electrical market looks absolutely fantastic," says Grady Saucier, senior vice president with MMR Constructors, Baton Rouge. "I've been in this business for 40 years and have never seen the opportunities that we have out there now—especially on the Gulf Coast." He credits the surge to the glut of natural gas across the region.
MMR, which was last year's ENR Texas & Louisiana Specialty Contractor of the Year, is involved in all three phases of oil and gas work: upstream, midstream and downstream. "With all the fracking that's going on, the production of gases and oils all along our lines is doing very, very well," Saucier says.
MMR's regional revenue reached $453 million last year, an increase of $150 million over its 2012 numbers. The growth arose partly from the contractor's decision to open branch offices in places like Odessa, Texas, to help build the infrastructure required for fracking. "We also expanded the scope of our services out of the Corpus Christi office related to the Eagle Ford [shale formation]," he says. "With the addition of those offices, it expanded our capability of going into some of those fracking areas."
Saucier adds that there's a lot of fabrication work going on in the Gulf Coast, mostly for offshore oil production platforms, another market that is wide open. "The end product of the gas—chemical plants and refineries and the expansions—all that is really healthy, so we did a lot of work in those areas last year as well."
The region's mechanical and plumbing specialties also remain strong, says Mike Kotubey, president of TDIndustries, Dallas. "There are still significant margin pressures through much of Texas. Health care and office construction is robust in Houston, technology is strong through the San Antonio-Austin region and new data centers are being developed across the state. All have complex mechanical and electrical systems in them, so the opportunities abound," he says.
Dallas is also experiencing "significant commercial growth in the office market," while "the health care market will be seeing a downturn since two major hospitals totaling over 3 million sq ft are finishing by year's end," Kotubey adds. "There's nothing in the pipeline to replace that type of project in the near future. With Toyota moving to the DFW metro area, we will see significant opportunities in the automotive market, albeit in knowledge workers rather than in manufacturing or assembly [jobs]."