Orange County’s environmental consulting companies saw another year of billings gains, fueled by huge growth at the local offices of some of the biggest names in the business.
The 30 largest companies here reported a 3% jump in 2007 billings to $479 million, according to this week’s Business Journal list. Local employment rose 13% to 4,856 people.
The list ranks companies based on billings generated out of their OC offices.
Three companies drove the gain: No. 1 Denver-based CH2M Hill’s Santa Ana office; No. 2 San Francisco-based URS Corp.’s Santa Ana office; and the local offices of Irving, Texas-based Fluor Corp.
The three added $26 million in revenue in the past year, easily offsetting a handful of companies that saw lower revenue. CH2M Hill’s $10.5 million gain alone represented the bulk of the added revenue on the list.
In all, 16 companies reported billings gains. Five showed declines. Eight were estimates. One was flat.
Environmental consultants have seen an interesting year as they’ve had to work past the effects of last year’s subprime mortgage mess and credit crunch, which has slowed homebuilding.
The companies reported a 9% gain in companywide billings to $8.4 billion, driven by the big three.
Fluor’s Gain
The most eye-catching gain came from Fluor, with offices in Aliso Viejo and Irvine. The company saw OC billings soar last year, posting a 478% increase in local billings to $8.9 million.
It added nearly 600 workers here, a 42% increase, and has plans to hire some 300 this year, including at its Long Beach office.
Fluor’s environmental consulting practice was by far the list’s biggest percentage gainer. Once one of the largest companies based here, Fluor moved its headquarters from Aliso Viejo to Texas in 2006.
The company, which Wall Street expects to do nearly $17 billion in sales this year, has landed a windfall of contracts recently for work on power plants, oil refineries and other projects that require remediation, clean up, air quality permits and other services.
Rising oil prices have many companies looking for alternative energy sources, which requires help from environmental consulting firms, according to Mike Milazzo, Fluor’s vice president and manager for its Southern California region.
“With the higher demand for energy and the higher cost of crude oil you have to come up with different alternatives,” Milazzo said. “The whole thing is driving innovation and that’s what we’re seeing.”
Despite the slow housing market, many environmental consultants are looking to work on projects such as tank removal, industrial cleanup and environmental planning for commercial and government construction projects, according to John Lovenburg, vice president of CH2M Hill’s Santa Ana office.
CH2M grew its billings 12% to $98 million. It saw a 12% decline in local workers to 351.
“Residential development has slowed but the industrial and commercial projects haven’t been impacted,” Lovenburg said.
Government work such as road construction projects related to the Measure M sales tax should provide enough work for engineering firms in the near future, said Paul Ryan, vice president of No. 2 URS Corp.
URS’s Santa Ana office grew its billings 17% to $55 million and increased OC workers 16% to 360.
“There’s been a pent up demand for infrastructure,” said Leonard Sequeira, executive vice president of No. 4 Connecticut-based TRC Cos. “We will be busy with those projects in Orange County.”
TRC’s Irvine office saw a 16% decline in local billings to $37 million. The company counts ConocoPhillips and Kinder Morgan Inc., both based in Houston, as clients. It cut its local workforce 13% to 250 people.
Also in the top five was No. 2 Shaw Environmental & Infrastructure in Irvine with an estimated $80 million in billings. Shaw Environmental has an estimated 80 OC workers.
Massachusetts-based Camp Dresser & McKee Inc.’s Irvine office came in at No. 5 with $33.6 million in billings, a 20% jump from the year before.
Other Issues
Aside from a slower economy, there are other problems facing the environmental consulting industry, executives said.
A shortage of experienced workers and fewer numbers of engineering college graduates pose challenges for the profession, said Sam Ali, vice president of land development for No. 25 Los Angeles-based Psomas in Laguna Hills and Costa Mesa.
“In the engineering industry in general, there’s a lack of experienced engineers,” Ali said.
Psomas, a newcomer to the list, was the second largest percentage gainer. Last year, the firm’s billings grew 44% to $6.5 million. Its OC headcount dropped 7% to 134 people.
Relocating people to OC has been a challenge, Ryan of URS said.
“Orange County’s high real estate prices have been a deterrent to attract talent from other states,” Ryan said.
Another newcomer to the list was No. 19 Stantec Consulting Inc.’s Irvine office. The Edmonton, Alberta-based firm, whose clients include the Irvine Ranch Water District and the city of Anaheim, saw its billings fall 18% to $8.8 million. The company’s OC headcount dropped 18% to 179 people.
Stantec operates existing offices in Woodland Hills and Irvine. Stantec’s U.S. headquarters is in Irvine. Last week, the company said it’s acquiring Secor International Inc., an environmental consulting and engineering firm. Terms of the deal weren’t disclosed.
