Boom Pushes Some Trade Markets Past 100% Employment
Revenue among California’s largest specialty contractors continued to climb last year. Firms participating in ENR California’s annual survey reported an annual revenue jump of nearly 8% last year.
Structural subcontractors—steel and concrete—fared best. Schuff Steel and SME Steel Contractors saw revenue jump in excess of 30%. Concrete contractors, including Bomel Construction Co., Pacific Structures Inc. and Largo Concrete, added more than 32% in revenue garnered from work performed in California. Bomel’s revenue spiked by 74%, to $120 million, last year.
The fever pitch of construction has raised staffing concerns among many trade contractors. “The electrical projects being bid today will be built with electricians that aren’t living here today,” says John Boncher, president and chief executive officer of Cupertino Electric Co. The firm ranked at No. 3 overall, with $539.5 million in revenue.
“We are at 100% employment, and the demand for skilled tradespeople is only going to go up, driven by the number of major projects in the pipeline. Some of the bids we are seeing have surprisingly tight numbers, which is risky, considering that we don’t know where future labor is coming from,” Boncher adds.
The San Francisco Bay Area’s labor market continues to be especially tight. Dave William, president of Pacific Structures, says his firm addresses this challenge “by partnering with clients on design-build and design-assist solutions, which enable us to lock in critical resources now for projects starting as late as Q4 2016. With a firm backlog and strong influence over the structural design, we can position ourselves to greatly reduce our clients’ risk.”
Cupertino’s Boncher says the building boom is partly fueled by competition among high-tech firms for the best and the brightest. “Today, a new sexy building is part of the benefits package for employees,” he says. “With all of the tech companies in our area competing for the same top-notch talent, having a ‘hot’ building that’s been in the news is another way employers are looking to retain good people. It’s definitely having an effect on our business.”