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Smaller Construction Firms See Most Growth

Last year was a mixed bag for construction companies with local presences.

While most reported growth in 12-month revenue from their Orange County operations, the select few that saw declines brought the combined revenue of all the top 28 firms down 1% to just short of $10 billion, based on this week’s Business Journal list.

They reported 9.3% growth in OC employees to 5,644. The number of OC projects increased 16% to 3,590.

The construction companies that saw the most growth percentage-wise were smaller firms with less than $250 million in revenue from their OC operations.

No. 20 on this year’s list, Costa Mesa’s Innovation Construction Solutions, for instance, more than doubled its OC revenue to $72.5 million.

The company’s “significant growth in revenue [is] thanks in large part to a record backlog [as a result of COVID-related project postponements in 2022] as well as continued robust demand for our soil and groundwater remediation services and our newly added wastewater treatment construction services,” President Hirad Emadi told the Business Journal in a statement.

ICS’ revenue growth, the largest reported among local construction companies, came in tandem with its headcount local increase; the firm upped its OC employee count 28% to 141 personnel.

ATI Restoration in Anaheim, No. 24 on the list, saw the second-largest growth in OC revenue: 70% to $64.1 million.

The company, which specializes in restoring and reconstructing buildings damaged by natural and man-made disasters, saw “increases in both residential and commercial restoration jobs of all sizes, including a large environmental remediation job in OC,” a rep told the Business Journal in a statement.

ATI’s headcount also climbed along with its revenue: 38% to 353 employees.

Other companies that saw revenue increases include Morris Inc. in Irvine, No. 25 on the list, which reported a 33% revenue jump to $64 million and Anaheim-based Lyle Parks Jr. Construction, ranked No. 28, whose revenue grew 16% to $52 million.

­Declines

The largest firm that saw a drop in revenue was KPRS Construction Services Inc., which is the builder for Shopoff Realty Investments’ Parkhouse Residences at Uptown Newport, a 30-unit luxury condo complex that will be completed this summer.

Brea-based KPRS, ranked No. 5 on the list, reported a 16% dip in revenue to $877 million over the past year.

Officials attributed the slowdown to “rising costs and [high] interest rates,” Project Manager Christy Thordsen told the Business Journal.

Construction costs have been on the rise over the past few years, driven up by higher labor costs and the rapid inflation of key construction materials.

Construction firms “are competing for a limited pool of skilled workers,” according to a report by CBRE Group Inc.

Additionally, prices of wood, steel, concrete and masonry have all increased more than 14% from 2020 to 2023, according to construction data company Gordian.

This year for KPRS, however, “appears to be very strong,” Thordsen added.

The firm that saw the biggest revenue decline from local operations last year was Redwood City-based DPR Construction, ranked No. 16, which reported a 57% dip to $108 million.

San Fernando-based Bernards, No. 17, saw revenue fall 30% to $92.5 million. Moorefield Construction Inc. in Santa Ana, No. 15 on the list, reported revenue declined 30% to $124.6 million. The firms did not respond to requests for comment.

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