Orange County’s largest commercial construction companies defied some worrisome regional trends to post their best revenue year in a decade.
The 32 biggest doing work here posted $9.1 billion in local revenue during the last reported fiscal year, based on this week’s Business Journal list.
That’s a post-recession high and a 12.5% year-over-year increase; last year 30 companies were included on our annual list.
The previous high-water mark in the past decade came in 2009, when about $8.5 billion in revenue was reported here as area companies finished a series of large public-sector projects, and private-sector development neared a shutdown in the Great Recession.
There are no signs of an imminent economic downturn now, though a limited number of large public-sector projects could eventually impact the local market; just two of the 27 largest projects in California that broke ground during the year were in OC, according to trade data.
The largest local job begun last year was an estimated $1 billion modernization project at the AES Huntington Beach power plant on Coast Highway, according to data from ENR California, which said it was the sixth-largest project to start in California during the year. The replacement of the 1950s-era plant should continue through 2020. It was approved last year and is being headed by Omaha, Neb.-based Kiewit Corp., which doesn’t have a local office.
Local offices’ backlogs appear strong in the near term, despite the lack of blockbuster projects. The value of contracts awarded to ranked companies over the year also increased about 12% year-over-year to $9.7 billion.
The list ranks companies by revenue of OC operations. This edition lists 20 reporting year-over-year increases, including eight of the top 10 whose combined revenue is about 70% of the list total.
Six others reported declines, and the remaining entries are Business Journal estimates.
Ranked companies employed about 6,200 here as of May, up 10% year-over-year. Local employment in the industry, as reflected on the list, is now at its highest level in a decade.
The national industry’s unemployment rate stood at 4.4% in May, down from 5.3% a year earlier, according to an analysis of U.S. Bureau of Labor Statistics data by the Associated Builders and Contractors trade association in Washington, D.C.
Top Names Remain
There are no new names among the top 10 on the list, though some companies moved to different spots.
• The Newport Beach office of St. Louis-based McCarthy Building Cos. retained the No. 1 position with $932 million in revenue for the year, up nearly 20% year-over-year. The employee-owned firm’s forte is diversification, its business including healthcare, performing arts and educational facilities projects, in addition to parking structures.
The mix “has mitigated any spikes up or down over the past 10 years,” the company said.
A good amount of the office’s work is outside the county. Recent contracts in Los Angeles County include a 380,000-square-foot student housing project for California State University-Los Angeles and a new healthcare campus in Downey. In OC, it’s worked on a groundwater replenishment system in Fountain Valley for the Orange County Water District.
• The Irvine office of Clark Group moved up two spots to No. 2 with $818 million in revenue, up 22%. As with McCarthy, L.A. County is providing a good source of business for Clark, which is working on an expansion project at Los Angeles International Airport and was recently awarded a $400 million design-build contract for the Long Beach Civic Center.
The 600,000-square-foot Long Beach project will be completed by 2020 and include a 274,000-square-foot City Hall, a 237,000-square-foot port headquarters, a 92,000-square-foot library and new parking facilities.
• The rest of the top five are Turner Construction Co., with $816 million, up 7%; Hensel Phelps, with $750 million, down 3%; and ARB Inc., with $699 million, up nearly 35%.
One notable name that didn’t rank is Whiting-Turner Contracting Co., which has an Irvine office but didn’t respond to inquiries for the list. The company’s reported to be heading much of the Star Wars-related expansion at Disneyland Resort, an estimated $500 million project for the firm.
Question Marks
Recent research suggests a mixed bag for the construction industry nationally and regionally.
The value of construction starts in April was down 13% month-to-month to a seasonally adjusted annual rate of $674.3 billion, according to Dodge Data & Analytics, about a 4% year-over-year decline.
The drop followed an 11% March gain that was the highest volume of construction starts in six months, according to Dodge Data.
The Orange County, Los Angeles and Long Beach region combined for about $1.3 billion in construction starts in April, down 26% year-over-year. Residential projects took the biggest tumble in starts, down 41%, while nonresidential dropped 3%.
So far this year, the region’s number of starts, valued at about $4.1 billion through April, is down about 53% year-over-year. Nonresidential projects totaled about $1.7 billion, down 67%, and residential-related starts totaled $2.3 billion, down 30%.
