Driscoll’s comments on growing demand are backed up by data from this year’s contractor survey.

In Gilbert, Ariz., Sundt Construction and PCL Construction are delivering a $500-million water treatment facility.
Photo courtesy Sundt Construction

Overall, the top 25 firms on ENR Southwest’s Top Contractors list reported total revenue of $12.52 billion in 2023, up 13% over the same group’s 2022 revenue. That continued a growth trend from the previous year, when the top 25 Southwest contractors collectively reported an increase of 22% for 2022—which followed a 21% decline in 2021.

Overall, the revenue for all 49 firms included in this year’s ranking follows a similar pattern. The average revenue per firm increased to $297 million in 2023 from $263 million in 2022, a 13% jump. In the year prior, average revenue per firm had seen a healthy increase of 19% in 2022, after falling 17% in 2021 during the pandemic.

Looking at specific market sectors, general building saw modest growth of 7%, from $7.97 billion in 2022 to $8.54 billion in 2023. However, there were significant swings within the general building market. Revenue from multiunit residential and hospitality projects grew 37% and 45%, respectively, during 2023, while retail project revenue dropped by 47%.

Manufacturing projects produced revenue growth of only 4% in 2023, according to this year’s survey. On the other hand, telecommunications projects—a category that includes data centers—saw revenue surge 74% to $2.5 billion from $1.44 billion in 2022.

Clayco Construction recently completed the 26-story Skye on 6th, a residential tower in Phoenix.
Photo courtesy Clayco Construction

No Slowdown Ahead

The Arizona market remains solid. “We see strong business across our footprint,” says Gretchen Kinsella, Arizona business unit leader for DPR Construction, noting that health care, data centers and advanced manufacturing sectors are especially strong.

“We are seeing local health systems continue to make strategic investments of different sizes and scale,” she says. Meanwhile, the market for data centers and advanced manufacturing facilities is “booming,” she adds.

“Continued cloud growth, the ongoing growth of AI and the focused effort to increase domestic manufacturing is driving a lot of work,” Kinsella says, noting “an uptick in second- and third-tier manufacturing suppliers investing in projects to support semiconductors and electric vehicle production.”

Mike Hoover, CEO of Sundt Construction, agrees that data center projects will remain prominent, noting that “the explosion with AI is creating the need for more data centers.” That is further fueling demand for solar projects, which are needed to help power these facilities.

“There will be a resurgence with power providers needing power generation,” Hoover says. “That could be solar, [but] I could see where it could have to go back to some gas-fired power plants.”

Chart by ENR

Ryan Abbott, Southwest region president for Clayco Construction—which did not participate in this year’s ranking—sees both expansion and continued transformation ahead for the region.

“The projects are growing in ambition and scale [and] shrinking in schedule,” Abbott says, adding that the market is more challenging to orchestrate than it has ever been. “No longer are we building a product on a singular site, we’re building modules all over the region and then transporting them for assembly.”