Specialty Contracting Companies See Steady Flow of Business
Revenue for the Midwest’s top specialty contracting firms remained strong in 2018. Although business was down last year compared with the previous two record-setting years, leaders from the firms tend to agree they have more than enough in the pipeline to weather any storm.
A total of 68 firms responded to ENR Midwest’s annual survey and reported total revenue of $8.84 billion. That’s down from the $10.03 billion in work that 55 contracting firms reported last year, but the 2018 revenue was still strong enough to rank as the third-highest year since ENR Midwest first conducted the survey in 2004. Respondents covered the entire 11-state area of Ohio, Indiana, Michigan, Illinois, Wisconsin, Minnesota, Missouri, Nebraska, Iowa, Kansas and Kentucky.
The projects from those top firms over the last year included hospitals, convention centers, automotive assembly plants, highway bridge repairs and Big Ten college football stadiums. They covered the spectrum of mechanical, concrete, electrical and other specialty work.
Freeport, Ill.-based Mechanical Inc. ranked fifth among this year’s top specialty firms, the same as last year, based on a large portfolio of projects that included 84 mechanical and nine concrete jobs. Among the largest of these was a $14.5-million project at SwedishAmerican Health Systems in Rockford, Ill. Scheduled for completion in spring 2021, the work involves a state-of-the-art, four-story women’s and children’s tower and includes an upgrade of the current central utility plan as well as a remodel of the existing pediatric unit.
“The word ‘partner’ gets thrown around a lot, but when we approach a project like this, we truly believe we are a partner with our customers,” says Tom Matus, Mechanical Inc.’s strategic growth manager.
“Rumors of a looming recession have an impact on how we go to market, but not negatively,” says Matus. “Could there be a slowdown? Sure. But we don’t focus on one specific vertical.”
Greg Gossett, president and CEO of Indianapolis-based ERMCO, agrees. “If there’s a recession coming, we’re certainly not seeing it in the work outlets we’re handling,” Gossett says. ERMCO ranked 28th in ENR’s list for 2019, and a large part of their total revenue is derived from $41 million in electrical work for Cincinnati Children’s Hospital.
“That’s a project we’re really proud of right now,” Gossett says. He pointed to ERMCO’s strong relationship with Messer Construction as a key to overcoming the logistical challenges of working in an out-of-town urban area. “We feel it’s a premier project for the city of Cincinnati and for children’s health.”
ERMCO also maintains another strong health care partnership in its home state with Indiana University Health. The company handles electrical work for five hospitals in IU’s network, reaching across the state from Frankfurt to Bloomington to Indianapolis.
Mechanical Inc. is one of four firms based in Illinois that finished in the top 10 of the survey. Michigan and Wisconsin also had strong showings, each with two top-10-ranked firms. Headquartered in Detroit, Motor City Electric Co. (MCE) ranked third this year, with revenue derived in large part from work with Michigan-based companies such as DTE Energy, Consumer’s Energy, Ford Motor Co. and General Motors, among others. This year marks the first time MCE appeared in our rankings.
One of MCE’s largest projects is the $13.7-million Consumers Energy Freedom Gas Compressor Station upgrade in Manchester, Mich. MCE is providing electrical construction and installation for the upgrade. A new compressor building housing five compressors is currently under construction. Work on the building is being handled in phases to make sure natural gas compression can continue while construction is underway.
Another large project under the MCE umbrella is the DTE Energy Central Energy Plant for Ford Motor Co.’s Research and Engineering Complex in Dearborn, Mich. The facility uses both natural gas and steam to provide heating, cooling and electrical power for the complex. To keep on top of the compressed schedule, MCE took advantage of their in-house 3D building information modeling (BIM) group, which enabled prefabrication of the duct banks, feeder conduits, supports, cable trays and wiring harnesses.
In both the DTE and Consumers Energy projects, MCE utilized their in-house 100,000-sq-ft prefabrication facility to save both time and money for their customers. For example, prefab work was cut, drilled and assembled in the shop. Sections were then sent to the jobsite in manageable assemblies for a quick final installation.
Steve Frantz, MCE executive vice president, cited Detroit’s construction renewal that has transformed the city this decade.
“We feel really good about the future,” says Frantz. “There’s a lot of business coming into Detroit. Between health care, residential … there’s no reason for a slowdown over the next five years.”
Jeff Blasi, regional business analyst for West Chester, Ohio-based Lithko, is also bullish about the immediate future of his company.
“The opportunities for additional work are such that the growth rate can continue for at least another six to 12 months,” says Blasi.
Lithko ranks 13th this year thanks in large part to a number of projects around central Ohio, such as the nearly $40-million construction work on the downtown district Bridge Park in Dublin. The company is currently in the middle of construction on a new mixed-use building, a six-story parking garage and podium structure. Of the eight total city blocks Bridge Park makes up, Lithko has worked on five for general contractor Brackett Builders.
But the project was not without its headaches. Four current construction projects and existing retail and residential buildings nearby required Lithko to schedule early concrete placements, which themselves required a new permit for each placement. Deliveries have to be coordinated at least a week in advance and the team meets with their customer at least once or twice a week.
Lithko is currently working on a $12-million mixed use residential/commercial property project by Ohio State University’s campus that includes a parking garage and apartments. Additionally, Lithko is also working for Elford Inc. to create a 105-ft-tall baby formula drying tower for Nature’s One in Heath, Ohio.
“Our backlog in Columbus and in the Midwest is strong,” Blasi says. “There’s no indicator indication the market will shift downward in that six- to 12-month time frame.”