Orange County’s largest commercial construction companies showed no signs of a slowdown in activity last year as a variety of large private and public-sector projects helped push revenues to a post-recession high.
The 30 biggest construction companies doing work here increased local revenue by 5% during the year ended April 30 to a shade under $8 billion, based on this week’s Business Journal list.
It’s the highest total on the ranking since 2009, when construction companies were wrapping up a series of large public-sector projects, and private-sector development was close to shutting down due to the Great Recession.
The list ranks companies by revenue from OC operations. This edition lists 20 that reported year-over-year revenue increases, including eight of the top 10 whose combined revenue represents about 70% of the list total. Eight others reported declines, and the remaining entries are Business Journal estimates.
Ranked companies employed about 5,700 in OC as of May, a 3% increase year-over-year. Local employment in the industry, as reflected on the list, now stands slightly above where it was in 2009.
The national construction industry’s unemployment rate stood at 5.3% as of May, the lowest it’s been since mid-2001, according to an analysis of U.S. Bureau of Labor Statistics data by the Associated Builders and Contractors, a trade association based in Washington, D.C.
• The Newport Beach office of St. Louis-based McCarthy Building Cos. retained the No. 1 position with $775.7 million in revenue reported for the year, up nearly 5% from a year earlier. The employee-owned firm’s recent local activity has included a host of healthcare, performing arts, and educational facilities projects, in addition to parking structures.
• The Irvine office of Hensel Phelps moved up a spot to No. 2 on the list with $774 million in revenue, up 12%. The company reported generating local revenue from work at Los Angeles International Airport and other out-of-town projects.
• The list’s top five consisted of Turner Construction Co., with $763 million; Clark Construction Group California, with $672 million, up 17%; and ARB Inc., with $497 million, up nearly 11%.
Backlog Back Up
The construction outlook appears healthy for ranked firms. The backlog of project awards they reported in the past year increased by about 16% year-over-year to $8.2 billion, reversing a decline two years earlier.
Recent research suggests a mixed bag for the national construction industry. The value of construction starts in April dropped 13% from March to a seasonally adjusted annual rate of $647.8 billion, according to Dodge Data & Analytics. The decline followed three straight months of gains.
Local construction firms looking for large projects to boost their backlogs increasingly have to look outside of OC to find that business, however. Only two of the 30 largest commercial construction projects that broke ground in California last year were in Orange County, according to trade publication ENR California.
The $500 million first phase of the Disneyland Resort expansion, the 14-acre “Star Wars” themed land, was the largest local project to break ground last year, according to ENR’s data.
The publication put a $500 million price tag on the project, which Whiting-Turner Contracting Co. is heading. The company has an Irvine office.
Future phases of Disneyland-related development, which will include a 5,000-spot parking structure and related park infrastructure, will cost an estimated $1 billion to $1.5 billion, according to Anaheim city officials.
Five Lagunas, the redevelopment of the former Laguna Hills Mall that’s being overseen by developer Merlone Geier Partners, was the other OC project that made ENR’s list.
• C.W. Driver, No. 15 on our ranking, is heading construction of the Five Lagunas project, which will turn the indoor mall into a downtown-like environment featuring new retailers, a movie theater complex, a new parking structure and a 350-unit apartment complex.
Core work on the last Orange County commercial project with a price tag believed to have topped $500 million, the multibuilding campus of Broadcom Ltd. near the Irvine Spectrum, will wrap up in the next few months.
• DPR Construction, No. 9 on the list with $386 million in local work, headed the Broadcom project, which was initially envisioned as a build-to-suit development for the chipmaker when it broke ground.
Broadcom now plans to sell back the project to Aliso Viejo-based master developer FivePoint Communities Inc. for $443 million. FivePoint anticipates putting about $50 million into the property to make it tenant-ready.
The developer intends to lease back two of the four main offices to Broadcom, which has shrunk its local operations since its sale last year to Avago Technologies Inc.
