Engineering Firms Up, But Some Backlogs Shrink
For those trying to figure out whether Orange County’s extended boom may be tapering off, a look at the largest engineering firms operating here may only add to the confusion.
The 30 largest firms here had a blockbuster run in the past year, with billings generated through OC offices more than doubling to $4 billion for the 12 months ended June 30. The largest firm, Aliso Viejo-based behemoth Fluor Corp., accounted for much of the gain. Still, without Fluor, the remaining firms saw OC billings jump 12% to $610 million. The list ranks engineering firms based in OC or with operations here by local billings, including two Business Journal estimates.
But the firms also saw their collective backlog for future work drop 30% to $8.9 billion from a year ago. Here again, Fluor skews the picture. The firm, which does most of its work around the globe, accounted for the entire drop. Without Fluor, the remaining firms that disclosed backlog numbers saw an 8% rise, to $190 million.
Still, five other firms besides Fluor reported smaller backlogs this year. But company officials contend the change doesn’t necessarily indicate a slowdown in future growth. Many just have gotten pickier about their projects, favoring those with high margins or quick turnaround times, they said.
That’s been the strategy at Fluor. The firm’s backlog fell off precipitously as it shifted away from growing billings to picking projects with higher profits. The engineering titan saw a 30% drop in its contract backlog compared with the previous period, bringing the value of contracts in its pipeline to $8.8 billion. But in the year through June, Fluor’s overall billings grew a whopping 143% to $3.4 billion,the largest percentage increase on the list and the biggest numerical gain by a wide measure.
Another firm that saw its backlog decline was No. 15 Boca Raton, Fla.-based Geosyntec Consultants, which has a Huntington Beach office. Its contracts for future work dropped 32% to $2 million. The firm’s OC billings were up 7% to $11.2 million.
No. 18 Cleveland-based Austin Co., whose OC office is in Irvine, saw its backlog drop 40% to $6 million. Others with smaller backlogs were: No. 8 Orange-based Holmes & Narver Inc., down 15% to $40 million; No. 16 Newport Beach-based Boyle Engineering Corp., down 3% to $10 million; and No. 22 San Diego-based Ninyo & Moore, whose OC office is in Irvine, down 12% to $2.3 million.
The number of engineers employed by the largest 30 OC firms grew 6%, or by nearly 100 people, to 1,527. The gain came without any help from the top two companies. Fluor, which employs 400 engineers in OC, showed no new engineer hiring, while No. 2 Denver-based CH2M Hill’s Santa Ana office added only one new engineer for a total of 82.
The firms have 6,150 total OC employees,a 2% increase from a year ago. Fluor reported no change in local employment. If Fluor is taken out, the remaining 29 firms increased employment 4%, to 3,650. Some of the gains were the result of a merger and not new job creation: No. 4 San Francisco-based URS Corp., which has an office in Santa Ana, acquired Austin, Texas-based Dames & Moore Group, the parent of Radian International of Irvine. Combined, URS showed a 55% jump to 155 OC engineers.
In another merger, No. 28 London-based AMEC Earth & Environmental, which has an office in Anaheim, absorbed Oakville, Ontario-based AGRA Inc. and its local operation in September. As a result of a restructuring at AGRA’s OC office, AMEC posted a 62% drop in local engineers from 21 a year ago to eight today.
Apart from Fluor, the biggest percentage increase in billings on the list was reported by No. 22 Fuscoe Engineering Inc. of Irvine, which saw its billings rise 44% to $7.9 million.
Fuscoe president Patrick Fuscoe attributed the gain in part to what he termed a “tidal wave” of elementary school construction. He also said that zeroing in on water-treatment contracts paid off.
“Water quality became such a political paradigm a couple years ago,” he said. “We saw that coming.”
Other high-growth companies included No. 10 Oakland-based EQE International Inc., which has an Irvine office, up 40% to $17.8 million in billings; and No. 9 Pasadena-based Tetra Tech ASL, which also operates out of Irvine, up 35% to $27 million in billings.
Firms posting a decline in billings were: No. 29 New York-based Parsons Brinckerhoff Quade & Douglas Inc., which has an office in Orange, down 53% to $4.1 million; Austin, down 17% to $10 million; Holmes & Narver, down 15% to $34 million; No. 25 Oakland-based Geomatrix Consultants Inc., which has a Costa Mesa office, down 14% to $7.7 million; and No. 20 Irvine-based Leighton & Associates, down 10% to $8.1 million.
Austin attributed its 17% decline to the 1999 completion of a $320 million project for Boeing Space Systems in Huntington Beach. The company showed no change in engineering employment and hired two new non-engineering employees.
Holmes & Narver attributed its 15% decline in billings to a delay in two big government contracts that had been put off until this year as the projects waited for funding, according to company spokeswoman Alexandra Spencer.
The top three firms each held the same positions as last year, but there was movement among the firms ranked fourth through eighth. Along with URS, No. 6 Costa Mesa-based Keith Cos. Inc. gained ground, moving up from No. 7 last year. The Costa Mesa firm grew 31% to $40.4 million in billings.
The Keith Cos.’ rise pushed Hunsaker & Associates Irvine Inc. down one slot to No. 7. Hunsaker & Associates grew billings 2% to $34.5 million.
Holmes & Narver slipped from No. 5 to No. 8, with a 15% billings drop to $34 million.
Newcomers to the list include: Ninyo & Moore, appearing at No. 22 with $7.9 million in billings; Newport Beach-based FBA Engineering Consultants, appearing at No. 27 with $5.5 million in billings; and Costa Mesa-based Petra Geotechnical Inc., appearing at No. 29 with $4.1 million in billings. n
