Public Sector Spending Drives Activity in Region
ENR Northwest’s second-annual survey of design and engineering firms highlights a growing regional market with strong transportation and water sectors.
The survey includes more than 30 firms that posted a combined $963.36 million in revenue for work completed in Washington, Oregon and Alaska.
Two-thirds of the Northwest top design firms performed transportation work, and water supply and sewerage/solid waste markets are strong for nearly half the firms on the list. Government and municipal spending is driving the work in the Northwest, say leaders at the region’s design firms. Successful ballot initiatives at the state, county and local level continue to fund projects.
More than one-quarter of Oregon’s payroll employment growth over the past 12 months was in the construction industry, the Oregon Employment Dept. and the U.S. Bureau of Labor Statistics said in an Oct. 16 release. The construction sector added 11,100 jobs, expanding by 11.2%. “Over the year, no other industry has grown nearly as fast as construction,” the OED said in a statement.
In Washington state, construction employment has grown by 56.7% since the trough in the first quarter of 2012, says the Washington State Economic and Revenue Forecast Council in a September release. The council expects construction employment to grow 5.9% this year and 0.8% in 2019.
“There’s robust demand in the market for infrastructure projects,” says Al Barkouli, chairman and CEO of David Evans Enterprises Inc. in Portland, Ore. Ranked No. 1 in the survey, David Evans saw design revenue in the Northwest tick up in 2017 to $113.05 million, with nearly half of it from the transportation market.
The firm’s Northwest transportation design projects include the E130 segment of Sound Transit’s East Link extension from Seattle to Bellevue, Wash., a $3.7-billion project aiming to begin service in 2023. As part of a joint venture, the firm also is supporting preliminary design and an environmental impact statement for the region’s top High Capacity Transit corridor. The 12-mile Southwest Corridor serving Portland, Tigard and Tualatin in Oregon aims to complete preliminary engineering in 2020.
Barkouli is seeing more design-build projects, especially in the Puget Sound region, as well as discussions about public-private partnerships. The land development and private sectors are also strong, but Barkouli is keeping an eye on rising interest rates, which may affect financing. “We don’t see any major slowdowns, but there is some gray in the skies,” he says.
Government and municipal investment in infrastructure is also strengthening the water supply and sewerage/solid waste sectors in the Northwest. Water utilities are looking for ways to spend their capital so the infrastructure is more affordable, resilient and sustainable, says Sheina Hughes, vice president of the U.S. Northwest at Stantec, ranked No. 2 on the Top Design Firm survey. About a third of Stantec’s Northwest revenue is generated by water supply projects. The firm is working on a $36.6-million project upgrading pump stations and force main upgrades in Bellevue, Wash. In Portland, Stantec is assisting the Bureau of Environmental Services during construction of $50 million of improvements to one of its wastewater treatment plants.
A growing push for resiliency in water projects is affecting design work in the water sector, Hughes says. “Sometimes when we’re looking at this aged infrastructure, simple changes in our designs improve the overall resiliency of projects. It can be something as simple as relocating where the power supply comes in so that generators are above future flood levels.”
Specialty Contracting Survey
ENR Northwest’s Top Specialty Contractor survey includes 14 firms with a diverse range of trade specialties, from electrical to mechanical, concrete to curtain walls.
The survey lists 2017 revenue figures earned from projects located in Washington, Oregon and Alaska. 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.
More information on the strength of the region’s construction market can be found in the surveys, which are presented on the following pages.