Contractors finally ‘moving off the bottom’

Two of the biggest players in nonresidential construction are predicting a turnaround in the industry, despite the malaise in the general economy. “We feel that the construction market is moving off the bottom and finally showing signs of improvement,” says Nicholas Makes, Senior Vice President at the Turner Corporation. “We have been preparing for an upturn.”

Moreover, in its Spring 2012 edition of “Construction Economics – Market Conditions in Construction,” Gilbane Building Co. forecasts a 5.4% increase from 2011 in spending for all construction, a 6.2% increase for nonresidential buildings, and a 9.8% growth for private-sector work. However, spending also has a ways to go before reaching pre-recession levels: The predicted figure for private construction (including single-family homes) in 2012—$555 billion—is roughly 40% below the $912 billion mark for 2006.

Giants 300 construction firms are reporting that predominantly private institutional sectors, notably healthcare, are still seeing activity. “The intensity for jobs is great, as construction activity declines in state and local government work,” notes Dale Connor, Managing Director, Project Management and Construction (Americas) with Lend Lease. “Capital availability remains tight but is improving, and markets like healthcare and life sciences remain active.”

SCROLL DOWN FOR GIANTS 300 CONTRACTOR & CM AGENT + PM FIRM RANKINGS

Contractors are also seeing opportunities in markets outside the United States. Turner recently opened offices in Toronto and Vancouver and is partnering with Edmonton-based Clark Builders. In Mexico, the firm is currently working on several data centers as well as on a 51-story Latin America headquarters tower for Spanish banking group BBVA. Turner also opened new offices in Vietnam, Malaysia, and Turkey.

Rising costs, fewer skilled laborers

One concern contractors are bracing for is the rising cost of certain materials. “Metals are up due to increased world demand, which is affecting the MEP trades,” says Lend Lease’s Connor. Shortages of aluminum could affect the cost of building envelope materials, and rising oil prices are impacting the costs of building products such as drywall and glass.

Gilbane reports that concrete and steel are both experiencing cost increases ranging between 1.5% and 2.5% over the year. The overall Producer Price Index for February 2012 showed costs for construction materials up 4.4% in the previous 12 months.

Moreover, the Gilbane report says, while construction unemployment has dropped from 25% in February 2010 to 17% in March 2012, the actual number of construction jobs gained has remained flat, due to laborers actually dropping out of the workforce. The Gilbane study forecasts that when work volume begins to increase, labor costs will go up due to a lack of skilled workers.

Increasing efficiencies

Contractors and CM firms are reporting positive benefits from the use of BIM and lean building practices. At Barton Malow, use of the integrated project delivery model continues to expand in an effort to improve project performance. “Our use of BIM and lean construction principles and our corporate culture of collaboration have made IPD a natural extension of our services,” says Senior Vice President Alex Ivanikiw, AIA, LEED AP.

Ivanikiw says that his firm has been testing technologies for practical job site applications at its new Envisioning Center, in Southfield, Mich. “The Envisioning Center is connected to a full-scale gang box in our atrium, simulating how the use of technologies would apply on the job site and how these technologies—hardware and software—need to be adapted for use in the field,” says Ivanikiw.

Turner says it is also focused on improving construction efficiencies. “With the adoption and development of BIM tools and processes, and with widespread implementation of lean construction practices and IPD methods, Turner is performing the same work it has always performed faster and more efficiently,” says Makes.

While construction volume is expected to pick up modestly in the coming year, “The cost of buildings still lags normal labor and material inflation cost indices,” notes the Gilbane report. “It should continue to do so for some time to come, but the gap is narrowing.” +

CONTRACTORS

Rank	Company	2011 Total Revenue ($)
1	Turner Corporation, The	8,014,660,000
2	Whiting-Turner Contracting Co., The	3,826,610,062
3	PCL Construction Enterprises	3,611,192,729
4	Balfour Beatty US	3,428,962,433
5	Clark Group	3,380,129,779
6	Skanska USA	3,286,508,000
7	Gilbane Building Co.	3,028,728,000
8	Mortenson	2,456,960,000
9	Tutor Perini Corp.	2,360,916,000
10	Structure Tone	2,347,400,000
11	Hensel Phelps Construction	2,229,390,000
12	McCarthy Holdings	2,096,000,000
13	DPR Construction	2,000,332,304
14	Lend Lease	1,841,990,112
15	Holder Construction	1,766,000,000
16	Hunt Construction Group	1,750,000,000
17	JE Dunn Construction	1,716,858,016
18	Jacobs	1,644,500,000
19	Walsh Group, The	1,612,052,187
20	Brasfield & Gorrie	1,492,346,677
21	Suffolk Construction	1,425,000,000
22	Barton Malow	1,256,757,360
23	Swinerton	1,079,236,051
24	Pepper Construction Group	1,050,711,000
25	Flintco	1,003,400,000
26	HITT Contracting	976,397,916
27	Yates Companies, The	910,200,000
28	Weitz Company, The	881,339,956
29	Walbridge	867,900,000
30	Clayco	820,000,000
31	Webcor Builders	797,040,000
32	Austin Industries	776,534,824
33	Ryan Companies US	697,549,225
34	CORE Construction	671,535,195
35	Shawmut Design and Construction	662,800,000
36	Power Construction	654,000,000
37	Sundt Construction	644,029,962
38	Boldt Co., The	632,115,183
39	Robins & Morton	623,293,000
40	BL Harbert International	617,300,000
41	James G. Davis Construction Corp.	603,020,000
42	Layton Construction	601,200,000
43	Haskell	577,518,226
44	McShane Companies, The	562,442,191
45	Messer Construction	550,808,643
46	Gray Construction	514,039,421
47	Hoar Construction	503,668,000
48	Kraus-Anderson Construction	497,180,000
49	Choate Construction	482,410,138
50	Hardin Construction	477,879,091
51	McGough	477,000,000
52	EMJ Corp.	475,575,404
53	O’Neil Industries / W.E. O’Neil	458,290,000
54	Bernards	438,045,000
55	Manhattan Construction Group	423,285,000
56	Kitchell	407,469,000
57	C.W. Driver	401,952,720
58	W. M. Jordan Co.	377,529,253
59	Linbeck Group	324,000,000
60	Rodgers Builders	313,392,000
61	S. M. Wilson & Co.	300,581,922
62	Paric Corp.	285,000,000
63	HBE Corp.	279,200,000
64	E.W. Howell	266,485,000
65	Hunt Companies	263,902,629
66	Clancy & Theys Construction	253,468,947
67	Hill & Wilkinson General Contractors	253,101,000
68	Coakley & Williams Construction	236,521,534
69	Weis Builders	219,006,000
70	Alberici Corp.	218,453,766
71	Doster Construction	210,187,139
72	Batson-Cook	208,907,584
73	Harkins Builders	201,000,000
74	KBE Building Corp.	187,822,953
75	Heery International	134,514,000
76	New South Construction	187,706,000
77	Consigli Construction	174,112,428
78	Bette Companies	144,000,000
79	CG Schmidt	142,265,000
80	Absher Construction	130,129,012
81	Atkins North America	115,430,980
82	James McHugh Construction	102,622,708
83	Bomel Construction	99,930,000
84	IMC Construction	93,500,000
85	Wight & Co.	77,807,100
86	URS Corp.	76,986,048
87	Roche Constructors	75,272,999
88	Summit Contractors Group	64,000,000
89	Stalco Construction	58,800,000
90	Allen & Shariff Corp.	38,323,273
91	Jones Lang LaSalle	20,000,000
92	Epstein	16,860,278
93	Eaton Energy Solutions	13,773,148
94	Zak Companies	9,190,352

CM AGENT + PM FIRMS

Rank	Company	2011 Total Revenue ($)
1	Hoffman Corp.	1,880,463,527
2	Gilbane Building Co.	1,350,248,000
3	Manhattan Construction Group	723,987,000
4	Consigli Construction	459,028,178
5	Hill International	350,000,000
6	Jones Lang LaSalle	301,000,000
7	URS Corp.	279,147,870
8	JE Dunn Construction	207,481,662
9	Jacobs	182,820,000
10	Balfour Beatty US	125,078,599
11	Barton Malow	94,594,640
12	Structure Tone	80,000,000
13	Bernards	79,655,000
14	Robins & Morton	75,380,000
15	Lend Lease	72,824,093
16	Doster Construction	20,682,865
17	Flintco	18,100,000
18	Weitz Company, The	18,060,000
19	Allen & Shariff Corp.	17,663,909
20	Hoar Construction	14,472,000
21	McCarthy Holdings	12,000,000
22	Mortenson Construction	10,640,000
23	Swinerton	10,528,949
24	Power Construction	9,000,000
25	Yates Companies, The	7,900,000
26	Stalco Construction	4,820,000
27	Ryan Companies US	4,587,011
28	Brasfield & Gorrie	4,248,485
29	Kraus-Anderson Construction	4,120,000
30	Sundt Construction	3,634,695
31	S. M. Wilson & Co.	3,507,170
32	Pepper Construction Group	3,028,000
33	E.W. Howell Co.	2,450,000
34	Austin Industries	2,383,128
35	EMJ Corp.	2,114,155
36	Bette Companies, The	2,000,000
37	Eaton Energy Solutions	1,931,409
38	Hensel Phelps Construction	1,500,000
39	Haskell	1,249,381
40	Heery International	1,011,000
41	Epstein	898,431
42	Alberici Corp.	806,353
43	Gray Construction	535,116
44	IMC Construction	500,000
45	Rodgers Builders	321,000
46	Wight & Co.	318,400