Southeast Specialty Firms Report Increasing Activity
This year’s survey included an expanded geographic region, which drove a major increase in overall revenue
Throughout the Southeast, contractors and specialty firms alike have been experiencing significant strength in the varied construction markets. Both geographically and by market sector, the volume and pace of contracting is keeping firms busy, whether it’s estimating future projects or attempting to find a sufficient number of workers to build current jobs.
Results from ENR Southeast’s latest ranking of Top Specialty Contractors shows that, through 2016 at least, subcontractors continued to experience a strong market for their services. Also, specialty contractors contacted by ENR Southeast indicated that 2017 has provided a similar level of activity so far.
Jim Verner, president of Acousti Engineering Co. of Florida, which was ranked 12th by regional revenue, says that he currently sees “continued growth and expansions through all of the Southeast.”
A diverse group of project sectors are continuing to provide contracting opportunities, especially in the health care, mixed-use development and office categories, adds Dean Gwin, president and CEO of 13th-ranked Gate Precast Co., Jacksonville, Fla.
“Our futures list looks encouraging, but as always we must execute and close the deals,” Gwin says.
Respondents to the survey—roughly 90 in all—collectively reported $7.3 billion in 2016 revenue. That’s $1.1 billion higher than last year’s total of about $6.2 billion. However, that higher revenue total is due in large part to ENR Southeast’s geographic expansion in 2017, which added Alabama, Tennessee and Puerto Rico to the survey. Altogether, survey respondents reported about $844.3 million in 2016 revenue from those newly added areas.
By comparison, specialty contracting revenue from ENR Southeast’s previous coverage area of Florida, Georgia, North Carolina and South Carolina totaled nearly $6.5 billion, a roughly 4.8% year-over-year uptick.
On a state-by-state basis, Florida again registered the highest revenue total, with nearly $2.63 billion of work generated in the Sunshine State. The remaining state totals, from highest to lowest, were: North Carolina, $2.1 billion; South Carolina, $888.9 million; Georgia, $875.36 million; Tennessee, $480.32 million; Alabama, $333.34 million; and Puerto Rico, $30.6 million.
ENR Southeast’s geographic expansion also boosted revenue for several of this year’s top-ranked contractors. Coral Gables, Fla.-based MasTec, for instance, reported more than $1.1 billion in Southeast revenue, up considerably from the $776 million total from a year ago. That was sufficient to once again earn the firm a No. 1 ranking.
Another national firm, EMCOR Group, also saw its Southeast total rise considerably. For this year’s survey, the company reported revenue of nearly $702.3 million, up from its $557.6-million tally a year ago. Third-ranked SteelFab and fourth-ranked Comfort Systems USA both saw their respective Southeast survey totals rise considerably due to the geographic expansion.
This year’s Specialty Contractor of the Year, Cary, N.C.-based Precision Walls, also reported a significant annual revenue increase. Due in part to more than $16 million of revenue from the state of Tennessee, the contractor reported $229.2 million in 2016 Southeast revenue, up from $162 million a year ago.
Numerous markets show little sign of slowing. Across the Southeast, for example, specialty contractors are busy working at almost every major airport, and health-care facilities are still expanding and updating their facilities. That fact can be seen by reviewing this year’s ranking, where firms reported their largest projects. Throughout the ranking, health care and airport projects abound.
Less active markets, says Verner, include general-use office buildings and flex warehouses.
Meanwhile, the slowing multifamily market is decreasing the demand for parking garages compared with a year ago, says Gwin with Gate Precast.
While workforces are expanding, contractors indicate that the availability of workers remains a major concern.
“Several years ago we lost a huge portion of our labor markets, but now they seem to be returning back to the sector now that general works and overall construction has gained momentum,” Verner says. As a result, he says, “We now are more selective with the projects we pursue.”
Boosting the number of workers has been an ongoing effort, Gwin explains.
“Anytime we go from a recession to a thriving economy we face the same labor shortage; but [we] are able to eventually ramp up,” he says. “It’s painful, but that’s the commercial construction industry.”
Gwin adds: “We are able to train new employees by doing all we can to keep our seasoned veterans with us during the good and bad times.”
In ENR Southeast’s profile of Precision Walls, the specialty firm of the year, Brian Allen, the firm’s president, also notes the importance of employee training and retention.
Allen says taking a standardized approach to training—one that includes a week of training for new employees at one of three centers—has helped lower turnover rates. But dealing with the challenge of workforce shortages requires a multifaceted effort.
“It’s an issue we’re all dealing with, but just talking about it won’t help,” Allen says. “You just have to go out and recruit good people, and do what you can to keep them.”
About the Survey
ENR Southeast’s Top Specialty Contractors survey provides firms’ 2016 revenue figures earned from projects located in the states of Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee and Puerto Rico. In addition to revenue, the main ranking includes other information about each firm, such as top markets and largest recent contracts. Breakout lists rank firms based on state and specialty market sector revenue.