Region’s Specialty Firms Continue to See Healthy Growth
Business in the MidAtlantic is continuing on a relatively even keel for the region’s specialty construction firms, with electrical work a particular bright spot thanks to health care and data center projects. While Amazon’s planned second headquarters in Northern Virginia could boost the region’s office sector, steel contractors are worried about the sector’s overall health due to the impact of 2018 tariffs on their costs.
The 25 companies on this year’s MidAtlantic Top Specialty Contractor list reported combined regional revenue of $3.7 billion, compared with $3.1 billion for the 32 firms participating in the survey last year. Revenue comes from business in Delaware, Maryland, Pennsylvania, Virginia, West Virginia and the District of Columbia.
The top 10 firms on the list generated $3.1 billion in regional revenue, a 35% gain over last year. For a third consecutive year, EMCOR Group Inc. ranked first on the list, reporting $957.7 million in revenue, up from $925.25 million last year. MasTec moved up one spot to No. 2, with $856 million in revenue. It traded places with Comfort Systems U.S.A, which recorded $352.54 million in revenue. Southern Air, ENR MidAtlantic’s Specialty Contractor of the Year (See p. MA12), also rose one slot, to No. 7, as revenue climbed 14%, to $125.98 million.
This year the electrical sector was the largest revenue generator for 15 firms on the list. EMCOR ranked first in electrical work with $294.41 million, followed by Rosendin Electric, with $195.43 million, thanks to a data center in Ashburn, Va. Hatzel and Buehler, which recorded $142 million in electrical revenue, worked on the Penn Medicine Chester County Hospital Expansion in Pennsylvania. All of Rosendin’s and Hatzel & Buehler’s revenue came from electrical work.
Lee Richardson, president of Atlantic Electric LLC, says the company’s MidAtlantic work—“which has gone from very good to good”—is exclusively focused on airfield lighting.
The Charleston, S.C.-based firm moved up four spots to No. 24 this year after reporting $17.55 million in regional revenue compared with last year’s $17.41 million. “We have a fair amount of work [in the MidAtlantic] now … more on the military side, and we’re getting into some of the [Federal Aviation Administration] work,” Richardson says. “Air travel in general is growing … people will need to build more runways, so we expect we’ll probably see growth for the next 10 years.”
Atlantic Electric is working on a $34-million subcontract to a $100-million runway replacement and $12-million electrical subcontract for a $20-million airfield lighting modernization at the Oceana Naval Air Station in Virginia. The combined work includes five airfield lighting switchgear lineups and installation of 2,000 new airfield light fixtures.
No. 10-ranked Philadelphia D&M, which reported revenue of $95.18 million, down from $106.09 million, has a focus on health care work. The firm’s largest project in 2017 was the $1.5-billion Foster + Partners-designed Penn Medicine Pavilion, on which the firm performed wall and ceiling work and interior finishes millwork. On the same project, No. 12-ranked Enclos–whose revenue declined 12%, to $70.66 million—is working exclusively on glazing and curtain walls.
Beckstrom Electric climbed four spots in the ranking to No. 15 with $33.86 million in revenue. The firm is working on a $9.4-million project at Inova Loudoun Hospital in Leesburg, Va. Scheduled to be completed in March 2019, the project involves upgrading the hospital’s emergency power distribution system for the existing hospital as well as for the future nine-story medical tower currently under construction. Beckstrom installed three 2.5-megawatt generators which back up the 4,160-volt emergency paralleling switchgear. “Additionally, we upgraded the existing normal power switchgear serving the existing hospital,” says Mick Beckstrom, the firm’s president. “The project required numerous outages and heavy coordination.”
Pressure from Chinese tariffs and uncertainty about the overall direction of U.S.-China trade have cast a shadow on the steel segment. “Our raw material costs are up 35% to 50% year over year,” says Glenn Sherrill, president of SteelFab Inc. He adds, “We’re concerned that if steel frame prices continue to escalate that the construction market will slow down or we’ll lose more market share to pour-in-place concrete frames.”
SteelFab, which has divisions in Virginia and Washington, D.C., saw its 2017 regional revenue jump 39%, to $107.5 million, lifting it to No. 9 on this year’s ranking, from No. 13 the year before. Those results reflect conditions before the recent tariffs took hold.
SteelFab provided structural-steel fabrication and erection for the relocated International Spy Museum, scheduled to open next year in Washington, D.C. The firm did similar work for the recently completed training facility for basketball’s Washington Wizards and Mystics.