Contractors Post Gains as ENR Expands Coverage Area
Contractors within the larger Midwest geographic region are adding services such as integrated project delivery
This is the first year that ENR Midwest’s Top Contractors ranking includes revenue from Iowa, Kansas, Kentucky, Minnesota and Nebraska along with the original coverage area of Illinois, Indiana, Michigan, Missouri, Ohio and Wisconsin. Along with 342,000 square miles of new territory, this year’s Top Contractors survey expanded as well, to 92 respondents, a 15% increase from 80 in last year’s survey. Starting with 2017, ENR has made the commitment to cover the entire Midwest and the entire U.S.
The Top Contractors ranking lists firms based on revenue from the previous calendar year. Along with revenue, the main ranking includes information about each firm such as its top markets and recent contracts. There are breakout lists that rank companies based upon state and specialty market revenue.
This year’s survey shows that contractors collectively earned roughly $34.9 billion in construction revenue for 2016, up from the nearly $26 billion reported for 2015, a nearly 33% increase. However, much of that increase is due to the geographic expansion, with $8.9 billion in new work coming from the expansion states. Our original Midwest states would have experienced only a modest increase without the expansion.
The Midwest Contractor of the Year, JE Dunn, benefited from the expansion, jumping from 22nd in last year’s Midwest ranking to No. 5, mostly from revenue from the state of Kansas. JE Dunn joins regional powers Walsh, Turner, Barton-Malow and Mortenson Construction atop the rankings.
No. 1-ranked Walsh Construction’s Midwest revenue grew to $1.6 billion from $1.45 billion a year ago, mostly on strong performance in the transportation market ($889.9 million). Last year’s No. 1, Turner Construction Co., clocked in just behind Walsh with $1.57 billion, a small increase over its $1.5 billion total in last year’s survey. Third-ranked Barton-Malow saw strong demand for its education and manufacturing projects, helping it rise from No. 4 last year. Its revenue rose to $1.49 billion in this year’s rankings from $1.09 billion in the previous year.
Fourth-ranked Mortenson saw its regional revenue jump to $1.48 billion from its year-ago figure of $594 million thanks to work on sports/entertainment projects such as U.S. Bank Stadium in Minneapolis and the new Milwaukee Bucks arena. Kiewit Corp. was elevated to the top 10 this year from 29th in 2016 with $1.02 billion in revenue, a leap from $279.96 million last year thanks to the expanded coverage area.
Growth sectors for Midwest general contractors, construction managers and design-builders are health care, education, power and manufacturing. The multifamily housing market is only holding its value from last year. Barton-Malow had $503 million in education work atop that segment list.
Power Construction—eighth on our list with $1.04 billion and fourth in the health care sector with $245 million—completed the $550 million, 1.2-million-sq-ft Shirley Ryan Ability Lab in Chicago, a facility that combines both a physical rehabilitation center with a laboratory for studying injuries. It is part of a trend in health care of designing for both research and treatment.
“They are seasoned buyers of design and construction services,” says Gary Schreiber, vice president with Power Construction. “We’ve completed a couple of projects under $10 million with full integrated project delivery with an integrated form of agreement. Our clients want a combination of flexible, adaptable spaces blended with delivery systems that are better for team performance.”
Another trend in this year’s listings was how locally dominated the various Midwest states are by leading construction companies. JE Dunn’s aforementioned Kansas totals were derived from its Kansas City, Mo., home turf where it is active in both Kansas and Missouri. Dunn topped the list of Kansas contractors with $522.85 million and ranked second in Missouri with $377 million.
“Kansas City is our hometown and it’s very important to us that we’re able to build as many of the high-profile projects, whether public or private,” says Gordon Lansford, president and CEO.
Other examples of regional command and control include Walsh, which put in place $641 million of work in its home state of Illinois; Barton-Malow with $1.08 billion in Michigan; and Mortenson’s $598 million in Minnesota. Elgin, Ill.-based IHC Construction, No. 48 on our list, derived all $222.9 million of its revenue from Illinois.