From data centers to clean energy projects and many private construction developments in between, ENR’s Southwest region has seen considerable growth and market opportunity over the past few years. And the companies included in this year’s ranking of the Southwest’s top specialty contractors have certainly kept busy.
Companies showing big gains include this year’s top-ranked company, and 2024 Southwest Specialty Contractor, Suntec Concrete. As reported in the Suntec profile elsewhere in this issue of ENR Southwest, the Phoenix-based company has grown by leaps and bounds in recent years. For this year’s ranking, for example, Suntec reported $765 million in regional revenue by 2023, a 37% gain compared to the previous year.
Graph by ENR
Overall, the top 15 companies on ENR Southwest’s 2024 Specialty Contractors List reported total 2023 revenue of $2.76 billion, up more than 9% from 2022 revenue for the same group. While a significant increase, this represents a slowdown in growth from the previous year, when the region’s top 15 specialty contractors posted a 37% increase in revenue.
The revenues of the 28 ranked companies follow a slightly different pattern. Average revenue per company rose to $112.3 million in 2023 from $128.9 million in 2022, a decrease of 13%.
However, this drop in average earnings is attributable to an increase in response rates from ENR Southwest’s specialty contractor survey. This year, in the region, seven additional companies reported their 2023 revenue from the states of Arizona, Nevada and New Mexico.
Meanwhile, the average of the top 10 ranked companies grew to $240.7 million in 2023, up from an average of $209.88 million based on 2022 revenue.
While current construction activity in the Southwest region remains robust, economic uncertainty, including related to the upcoming election, is increasing, at least in some sectors, according to several sources.
The Sheraton in downtown Phoenix is one of Rosendin’s recently completed projects.
Photo courtesy of Rosendin
Market uncertainty ahead?
As indicated in the chart above, revenue for the specialty companies participating in the survey has been rising over the past two years, after a notable drop in revenue in 2021. Whether there is another general decline remains to be seen. ahead, but Derek Wright, managing director of Suntec Concrete, says “there is a general level of uncertainty right now based on interest rates and the political climate”.
Elections always seem to induce some caution in the market, he adds. “Typically, we see that about every four years.”
Cody Kinnison, vice president of operations at Helix Electric in Reno, Nevada, also sees a slowdown in construction.
“National demand for new technologies is driving new AI-related construction.”
—Cody Kinnison, vice president of Helix Electric
“The volatility of major economic factors such as interest rates and the upcoming election make it difficult to predict near-term market conditions. However, domestic demand for new technologies is driving new construction related to semiconductor plants, centers of data and energy infrastructures”, he adds.
However, there may be a catch, Kinnison adds: “Northern Nevada can take advantage of this construction if we can provide the power.”
Availability of sufficient energy for some of these projects is a real problem, agrees Brandon Stephens, vice president of Rosendin’s Phoenix office.
“We’re seeing projects where people want to get started, but they don’t have a pre-existing power purchase agreement, and that makes those deals a little bit longer than people would have expected if you hadn’t already gotten in the queue “.
Southwest specialty contractors will have to wait to find out if and how significantly these issues affect future market activity.
Graph by ENR
The Ranking
As always, the top specialty contractor rankings are based on 2023 global revenue earned from projects located in the Southwest region that includes Arizona, Nevada and New Mexico. In addition, this top ranking includes information on the companies’ most important projects starting during 2023 along with data on their specialty categories. Also included are 10 rankings based on state-by-state revenue, as well as construction specialty and overall worldwide revenue.
