Subcontractor Revenue Lagging Market Pickup
Regional revenue for specialty contractors in the New York-New Jersey area declined in 2014, com- pared to the previous year, according to the results of ENR New York’s 2015 ranking of firms working in those fields.
Aggregate revenue for the top 45 specialty contractors on the 2014 list was $3.49 billion while those who ranked in 2013 reported $3.84 billion. The rankings are based on firms’ prior year revenue figures.
The 2015 ranking was the first not to include revenue from work in Connecticut, which now is being reflected in the Top Specialty Contractor ranking compiled by ENR New England.
Specialty contractors tend to lag increases in construction activity. So, despite the construction boom under way in the greater New York region – New York City experienced a 156% increase in building permits in the first half of 2015 – regional revenue among the top tier of companies in the current ranking rose slightly or was relatively flat.
“Subcontractors are involved in the back end,” explained John Rogers, managing director and head of institutional equity research at investment firm D.A. Davidson Companies.
Regional revenue for specialty contractors in New York and New Jersey peaked in 2012 at $3.95 billion, rising from $3.40 billion the previous year. But the total began falling in 2013.
In 2014, specialty contractors were essentially riding out the last surge in construction activity, but business is starting to pick up in 2015 and ahead in 2016, ac- cording to Rogers.
Some of the decline in regional revenue can be attributed to the completion of work related to repair required by the damage done by Superstorm Sandy in October 2012.
“We had 150 people working on Long Island repairing and rebuilding the electrical system after Sandy, but that was a one shot deal,” says Victor Salerno, CEO of O’Connell Electric Co. Inc.