Work for Orange County’s largest construction companies largely held steady last year, though those companies soon could be scrambling to find larger projects to help keep their backlog at customary levels.
The largest 25 construction companies on this year’s Business Journal list saw a collective 1% increase in revenue during the past year, to $5.1 billion. The modest increase represents the second year in a row companies on our list combined for a year-over-year revenue gain of about 1%.
The gains still are big improvements over the prior two years, when companies on the annual list posted drops of about 13% and 7%. The Business Journal ranks companies by annual revenue generated from OC of-fices, whether the projects are in OC or elsewhere.
Eleven companies on this week’s list reported year-over-year increases in business, though eight companies—including four of the seven largest companies on the list—posted declines. The results for six companies on the list are Business Journal estimates.
A few large projects that have recently wrapped up work, or are nearing completion, boosted revenue for several companies on this year’s list.
A nearly $550 million expansion of John Wayne Airport, which included a new terminal and parking building with 2,000 spaces, finished up most of its work last year.
Walt Disney Co.’s five-year, $1.1 billion expansion of its Disney’s California Adventure theme park in Anaheim is nearing completion with this month’s unveiling of its new Cars Land theme section.
Challenge
Finding similarly sized projects to replace those two big revenue streams and others could be a challenge, said Jim Madrid, vice president of business development at the Newport Beach office of McCarthy Building Cos.
“We’re seeing 20% more opportunities this year, but projects tend to be smaller, on average,” Madrid said.
McCarthy retained the No. 1 spot on this year’s list with $926 million in revenues, a small decline from a year ago.
The company was part of the three-year John Wayne Airport expansion project and also was the general contractor for the $563 million expansion of Children’s Hospital of Orange County, a project that’s set to wrap up later this year.
Kaiser Permanente is wrapping up work on a $461 million hospital in Anaheim and St. Jude Hospital recently began construction on a $285 million expansion expected to open in 2014.
Upcoming projects of similar sizes are few and far between these days, particularly for healthcare-related construction projects, according to Madrid.
“You had been seeing two or three $500 million projects on the radar screen every year, as well as a couple in the $200 million range. Now, it’s a smaller group,” he said.
Fewer megadeals going forward are likely a reason that companies on this year’s list appear to have seen a big drop in their backlog.
The dollar value of contracts issued to the OC operations of companies on this year’s list dropped nearly 18% during the past 12 months to $4.5 billion.
Just seven companies on this week’s list reported inking more new business in the past 12 months than they did in the prior year.
New government, education, healthcare and other infrastructure projects might be harder to come by, but traditional commercial development appears to ramping up—slowly.
“When we start getting the ‘surprise’ phone call (from a developer), then we know things are starting to get better,” Madrid said. “We’ve gotten several of those calls recently.”
Fluor Farewell
Long-time readers of the Business Journal will notice that this week’s list has one notable omission, engineering and construction giant Fluor Corp.
Until a 2005 move to Irving, Texas, revenue generated by Fluor—which started in Santa Ana in 1912 and more recently was based in Aliso Viejo—dwarfed those of all the other companies on the commercial construction list, and was the perennial No. 1 on the list.
Following that move to Texas, our estimates for the business generated by Fluor’s OC operations tended to be in the $1 billion-or-less range. Last year’s list estimated the company’s local revenue at $850 million, placing it at the No. 2 spot.
Fluor’s local operations—the company has about 1,400 OC employees—largely handle work for the chemical, mining and transportation industries, but the company doesn’t break out revenue specifically tied to construction work.
Rather than continuing to estimate Fluor’s local revenue, we’ve opted to remove them this time around.
Taking the No. 2 spot from Fluor this year is the Costa Mesa office of Maryland-based Clark Construction Group LLC, which reported just under $760 million in revenue. The company was one of the companies working on the expansion of Disney’s California Adventure, likely the largest ongoing construction project in OC over the past few years.
Download the 2012 OC’s LARGEST CONSTRUCTION COMPANIES list (pdf)
