Not even high interest rates, inflation and ongoing labor and material shortages are keeping contractors in the Midwest. The 84 companies that participated in the ENR Midwest prime contractor survey reported more than $66.9 billion in total revenue in the 11-state region in 2023, surpassing the $52.9 billion reported in 2022 by 81 companies and the $50.3 billion reported in 2021 by 96 companies.
Contractors say that having a diverse project portfolio and focusing on hot sectors such as mission-critical, healthcare, higher education and sustainable energy is helping them thrive despite the challenges.
Chicago-based Clayco, which posted revenue of $5.78 billion in 2023, up from $5.38 billion in 2022, reports a number of projects across sectors.
“Clayco has been fortunate to have many significant projects in various market sectors in the Midwest, including aviation work in Chicago and Fort Wayne, Ind.; a multifamily skyscraper in Chicago; high-tech manufacturing and life sciences projects in Indiana; along with confidential data centers in Indiana and Illinois, among others,” says Anthony Johnson, president of Clayco’s industrial business unit.
Graph by ENR
Mission critical work drives growth
He cites the company’s mission-critical work supporting cloud computing and the expansion of artificial intelligence, as well as the advanced manufacturing and automotive segments as driving revenue growth for the company.
“Mission-critical expansion is driven both by the exponential growth of computing and cloud storage needs in our economy and by the arrival of perhaps the most dynamic economic impact in our lifetime: intelligence artificial,” he says. “Growth in the high-tech and manufacturing segment continues to be fueled by manufacturing and semiconductor settlement, as well as growth in electric vehicle production and associated supply chains.”
The 314-foot-tall 220 North Ada, a residential tower, is replacing a one-story warehouse in Chicago.
Photo courtesy of Clayco
Detroit-based Barton Malow cited a variety of projects for its success. The company posted revenue of $5 billion in 2023, a record for the 100-year-old company, which had nearly $3.03 billion in revenue by 2022.
“Supply chain disruptions, rising material costs and labor shortages in recent years happen frequently.”
—Sean Hollister, Vice President, North Central Business Unit, Barton Malow
Barton Malow continues construction of the University of Missouri Children’s Hospital with its partner PARIC Corp. and also works on a major medical campus for Henry Ford Health in Detroit.
“We are currently finishing up a number of lithium-ion battery manufacturing plants for electric vehicles, which have been a large part of our business for the past few years,” says Sean Hollister, vice president of Barton’s North Central business unit Malow. “We also continue to see significant activity in sports and entertainment, higher education and healthcare.”
Another company that posted a good year was McCarthy Building Cos., based in St. Louis, which posted revenue of $1.61 billion in 2023, up from $1.31 billion in 2022.
“Business has been robust over the past year, particularly in the Midwest, where some major projects under construction include a 97-acre campus for the National Geospatial Intelligence Agency (NGA) and a 16-story patient care tower at Barnes-Jewish Hospital in St. Louis, as well as the 800 MW Double Black Diamond Solar Project in Waverly, Illinois, one of the largest solar projects in the state,” says Ryan Molen, Senior Vice President of Operations in the central region.
McCarthy is overseeing the design and construction of the 16-story Barnes-Jewish Hospital in St. Louis.
“The healthcare sector is expanding rapidly due to an aging population and the continuous evolution of medical technology, which requires new and updated facilities,” adds Molen. “Renewable energy is also on the rise as both the public and private sectors commit to reducing their carbon footprint and transitioning to sustainable energy sources.”
He also sees significant investments in battery storage, solar infrastructure projects and other renewables taking place, reflecting the need to improve and diversify energy sources to be more environmentally friendly and sustainable.
Even with their successes, contractors face obstacles, such as pauses and changes in projects.
Graph by ENR
“These pauses are often due to funding gaps, whether from private sources, developers or changes in government funding. The rapid pace of change reflects the dynamic nature of the construction and development landscape,” says Hollister.
Unexpected changes have ripple effects that contractors must also deal with.
“Unpredictable changes make it difficult for businesses to get what they need, when they need it,” Hollister notes. “Supply chain disruptions, rising material costs and labor shortages in recent years occur frequently, and mitigating them are among the contractor’s most important roles.”
