Southwest Specialty Firms Stay Busy, but Uncertainty Clouds the Future

By Scott Judy, Jack McMackin

Suntec Concrete, this year's No. 1-ranked specialty contractor, is keeping busy with high-rise projects.
*Photo courtesy Suntec Concrete*

Related Link:
ENR Southwest 2024 Top Specialty Contractors

From data centers to clean energy projects, and plenty of private construction development in between, the ENR Southwest region has seen considerable growth and market opportunity during the past several years. And the firms included on this year’s Southwest Top Specialty Contractors ranking certainly have kept busy.

Notable among the firms showing major gains is this year’s top-ranked company—and 2024 Southwest Specialty Contractor of the Year—Suntec Concrete. As reported in the profile of Suntec elsewhere in this issue of ENR Southwest, the Phoenix-based company has been growing by leaps and bounds in recent years. For this year’s ranking, for example, Suntec reported $765 million in 2023 regional revenue, a 37% gain compared with the year prior.

Chart by ENR

Overall, the top 15 firms on ENR Southwest’s 2024 Top Specialty Contractors list reported total revenue of $2.76 billion for 2023, up more than 9% over the same group’s 2022 revenue. While a significant increase, that represents a slowdown in growth from the previous year, when the top 15 specialty contractors in the region recorded a 37% increase in revenue.

The revenue for all 28 ranked firms follows a slightly different pattern. The average revenue per firm totaled $112.3 million in 2023 from $128.9 million in 2022, a 13% decrease.

However, this drop in average revenue is attributable to an increase in response rates for ENR Southwest’s Top Specialty Contractors survey. This year, the region saw seven additional firms report their 2023 revenue from the states of Arizona, Nevada and New Mexico.

Meanwhile, the average for the top 10 ranked firms grew to $240.7 million in 2023, up from the $209.88 million average based on 2022 revenue.

While current construction activity across the Southwest region remains robust, economic uncertainty—including that related to the upcoming election—is increasing, at least in some sectors, according to various sources.

The Sheraton in downtown Phoenix is one of Rosendin's recently completed projects.
Photo courtesy Rosendin

Market Uncertainty Ahead?

As noted in the chart above, revenue from specialty firms participating in the survey has been climbing over the past two years, after a notable drop in 2021 revenue. Whether another overall decline lies ahead remains to be seen, but Derek Wright, CEO at Suntec Concrete, says “there’s a general level of uncertainty right now based on interest rates and political climate.”

Elections always seem to induce some measure of market caution, he adds. “We typically see this about every four years.”

Cody Kinnison, vice president of operations with Helix Electric in Reno, Nev., also senses a construction slowdown ahead.

“The national demand for new technologies is driving new construction related to AI.”
—Cody Kinnison, Vice President, Helix Electric

“The volatility of more prominent economic factors like interest rates and upcoming elections makes predicting near-term market conditions difficult. However, the national demand for new technologies is driving new construction related to semiconductor plants, data centers and power infrastructure,” he adds.

There may be a catch, though, Kinnison adds: “Northern Nevada can capitalize on this construction if we can provide the power.”

The availability of sufficient power for some of these projects is a real problem, concurs Brandon Stephens, vice president with Rosendin’s Phoenix office.

“We are seeing projects that people want to get started on, but they do not have a preexisting power purchase agreement, and that’s pushing those deals out a little further than people would have expected if you haven’t already got into the queue.”

Southwest specialty contractors will have to wait to find out whether and how significantly such issues play into future market activity.

Chart by ENR

The Ranking

As always, the main Top Specialty Contractors ranking is based on overall 2023 revenue gained from projects located in the Southwest region that includes Arizona, Nevada and New Mexico. Additionally, this main ranking includes information about firms’ biggest projects to begin during 2023 along with data on their specialty categories. Also included are 10 breakout rankings based on state-by-state revenue as well as construction specialty and overall worldwide revenue.

Scott Judy is ENR’s Managing Editor. His roughly 34 years as a construction journalist began with an 11-year stint visiting and writing about construction projects in the Midwest region of Missouri, Kansas, Iowa and Nebraska. Then, in 2000, Judy helped launch ENR Southeast, now known as ENR Texas & Southeast. After all these years, Judy says his favorite part of being an ENR editor is visiting job sites and learning how—and reporting on—a team’s approach to overcoming the project’s design and construction challenges. And Judy says he never turns down an invitation for a project visit.