Last year, as the pandemic upended the construction industry, contractors hatched a plan to come together. Determined to keep jobsites open and deemed essential around the U.S., a group of contractors partnered on turnkey coronavirus prevention protocols for all companies to use.
This year’s Top 400 Contractors revenue results don’t immediately show how virus prevention methods changed productivity among firms. What the numbers do show is that securing construction’s essential status helped contractors avoid devastating losses.
“Following the CDC guidelines was absolutely crucial to our survival last year. It really saved us because we weren’t going to have a business without it,” says Turner Construction Co. President and CEO Peter Davoren. As a result, he says, “We were able to continue to function all through COVID after a slippery slope in the second quarter of last year.”
Despite the pandemic, aggregate 2020 revenue for the Top 400 reached $414.88 billion, 0.12% more than was reported by last year’s list—another record year, albeit by a small margin.
Bechtel lost its long-held top spot on the Top 400 list to Turner after the firm’s revenue declined in nearly all of its market sectors.
Moving forward after initial jobsite disruptions, the data shows that most Top 400 general contractors and construction management companies leaned on projects in their pipelines to keep 2020 revenue strong.
A majority of firms reported backlog abundance from a strong 2019. More than a few mid-size firms reported backlogs that can carry them as far as the second quarter of 2022. Larger firms report backlogs lasting well into 2023.
The median revenue for this year’s Top 400-listed contractors jumped to $501.9 million in 2020 from the $492 million reported for 2019. Nearly half of the Top 50 firms increased revenue while upper middle-tier firms stayed strong. Revenue from mid-tier firms generally outpaced firms at the same ranks last year. Of the 150 firms ranked between numbers 150 and 300, 138 reported more revenue than that group had indicated a year ago.
Many firms indicate that multitiered worker shortages will be the biggest 2021 challenge, compounded by low vaccination rates—which can increase risk of outbreaks, slow productivity, increase lead times and decrease project certainty.
Shortages of raw building materials such as copper, lumber, iron pipe and steel are also of immediate concern. Suffering under long lead times, some projects are shelved until further notice, putting firms back into a pandemic pause.
“These issues are being caused by high demand in the busy construction market and reduced production due to COVID shutdowns at plants—potentially impacting schedule and cost commitments,” says Mark Luegering, senior vice president and COO of Messer Construction Co.
When asked about customers’ No. 1 request, Top 400 contractors overwhelmingly report that eliminating risks related to a project’s costs and schedule led the list. Amid labor and materials shortages, some firms are addressing this by stepping up their preconstruction planning efforts.
“These preconstruction efforts are about more than estimating, and our building processes are about more than building safely with quality assurance,” says Turner Burton, president at Hoar Construction.
“Owners are always looking for more certainty in a project, from schedule to quality to costs,” Burton adds. “That’s why we’re focused on improving the entire development process.”