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 |
Related Stories
| Nov 5, 2013
Oakland University’s Human Health Building first LEED Platinum university building in Michigan [slideshow]
Built on the former site of a parking lot and an untended natural wetland, the 160,260-sf, five-story, terra cotta-clad building features some of the industry’s most innovative, energy-efficient building systems and advanced sustainable design features.
| Nov 4, 2013
Architecture and engineering industry outlook remains positive on all major indicators
While still below pre-recession levels, all of the key indicators in the latest Quarterly Market Forecast (QMF) report from PSMJ Resources remain in positive territory.
| Nov 1, 2013
CBRE Group enhances healthcare platform with acquisition of KLMK Group
CBRE Group, Inc. (NYSE:CBG) today announced that it has acquired KLMK Group, a leading provider of facility consulting, project advisory and facility activation solutions to the healthcare industry.
| Oct 31, 2013
74 years later, Frank Lloyd Wright structure built at Florida Southern College
The Lakeland, Fla., college adds to its collection of FLW buildings with the completion of the Usonian house, designed by the famed architect in 1939, but never built—until now.
| Oct 31, 2013
CBRE's bold experiment: 200-person office with no assigned desks [slideshow]
In an effort to reduce rent costs, real estate brokerage firm CBRE created its first completely "untethered" office in Los Angeles, where assigned desks and offices are replaced with flexible workspaces.
| Oct 30, 2013
15 stellar historic preservation, adaptive reuse, and renovation projects
The winners of the 2013 Reconstruction Awards showcase the best work of distinguished Building Teams, encompassing historic preservation, adaptive reuse, and renovations and additions.
| Oct 30, 2013
11 hot BIM/VDC topics for 2013
If you like to geek out on building information modeling and virtual design and construction, you should enjoy this overview of the top BIM/VDC topics.
| Oct 29, 2013
Increased backlogs, margins lead to renewed optimism in global construction
After prolonged economic uncertainty, a majority of executives in the global engineering and construction sector have fresh confidence in the growth prospects for the industry, according to KPMG International's 2013 Global Construction Survey. A general increase in backlogs and margins is giving cause for optimism across the industry, with further growth anticipated.
| Oct 29, 2013
BIG opens subterranean Danish National Maritime Museum [slideshow]
BIG (Bjarke Ingels Group) has completed the Danish National Maritime Museum in Helsingør. By marrying the crucial historic elements with an innovative concept of galleries and way-finding, BIG’s renovation scheme reflects Denmark's historical and contemporary role as one of the world's leading maritime nations.
| Oct 28, 2013
Urban growth doesn’t have to destroy nature—it can work with it
Our collective desire to live in cities has never been stronger. According to the World Health Organization, 60% of the world’s population will live in a city by 2030. As urban populations swell, what people demand from their cities is evolving.