While battling the headwinds of higher interest rates, labor shortages and inflation, many companies on the ENR Midwest 2024 Specialty Contractor List are boosting business by taking on mammoth projects, expanding its workforce and focusing on the most important items such as billing and collections.
The 53 companies that participated in this year’s survey reported revenue of $11.73 billion, up from the $8.03 billion that the 51 companies on last year’s list reported from the 11 states that s ‘include in the ENR Midwest region: Indiana, Illinois, Iowa, Kansas, Kentucky, Michigan, Missouri, Minnesota, Ohio, Nebraska and Wisconsin.
Large projects have been the bread and butter for many specialty contractors over the past year, a group that includes Freeport, Illinois-based Helm Group.
Graph by ENR
“The project sizes we’re seeing are much larger than in the past, and our backlog is as high as it’s ever been,” says Brian Helm, CEO and President. “We’ve been busy for the last year.”
Some of these works will not begin until next year. “A lot of our effort in 2024 was doing virtual design and construction of mega jobs that will start in 2025,” he says.
The busiest sectors for his company have been healthcare and data centers.
Helm Group, like other specialty contractors, has been dealing with high interest rates, which have driven up costs and prompted realistic conversations with clients, Helm notes. “Interest expense is definitely a cost of doing business that we value in our workplaces,” he says. “Showing this cost in our proposals can be revealing to some end users.”
“The project sizes we’re seeing are much larger than in the past, and our backlog is as high as it’s ever been.”
—Brian Helm, CEO and President, Helm Group
Helm Group is also spending more time than ever on billing and collections, but according to its CEO/President, there is some positive news related to rising costs.
“The increase in costs has become more predictable, so it is easier to foresee the escalation in our budget,” he notes.
Courteney McInerney, senior vice president of Motor City Electric, which does electrical construction, says business “has been robust over the past year, driven by major projects.”
One of its big projects is for a joint venture between car maker Stellantis and battery maker Samsung SDI, which is investing more than $2.5 billion in a 3.3 million square meter electric vehicle battery plant square in Kokomo, Indiana.
Other major projects for the company include the construction of the Gordie Howe Bridge and the redevelopment of the former Hudson’s Department store in Detroit into a new development that will include a hotel, offices, event space, meeting rooms, restaurants and residential space .
To be ready to tackle big projects, Motor City is adding to its workforce.
Motor City Electric is helping to transform the former Hudson Department Store in Detroit.
Photo courtesy of Motor City Electric
“We’ve expanded our workforce and added specialist teams to meet growing demand in sectors such as EV infrastructure and large-scale construction,” says McInerney. “It’s improving our ability to manage complex projects efficiently.”
Instead, PCL Construction Enterprises, which has been building in the Midwest for more than 46 years, is focusing on smaller projects in its Minneapolis office, where its special projects division provides small contractor services to clients in the construction, civil and infrastructure.
“We leverage innovation and technologies that enable us to offer our clients PCL’s brand strength and scaled resources for efficient and cost-effective delivery of smaller-scale projects ranging from $10,000 to $15 million,” says Chris Tauscheck, director of special projects.
This bigger-is-not-necessarily-better approach to projects is paying off. “In Minneapolis, we’re on track to double our size in the next two to three years, driven by an expanding market and increased project volume,” he says.
Graph by ENR
PCL’s work has increased in a number of sectors, including clean manufacturing, where the company focuses on building clean rooms for the production of medical devices, as well as higher education and hospitality, including several remodels of ‘hotels driven by post-pandemic changes and overdue upgrades. It is also working on mission-critical data center projects through partnerships with colocation providers, he says.
Looking ahead, Tauscheck says PCL anticipates continued growth and will look to expand its talent pool in the special projects division.
The Motor City is also preparing for a robust and continued market. “We anticipate continued growth,” says McInerney. “Our focus will be on leveraging our expertise to secure and execute innovative large-scale projects.”
Helm says a long-awaited cut in interest rates by the Federal Reserve will spur growth.
“I think when the Fed cuts rates, we’ll see smaller private developers start new projects and hopefully the industry can keep up,” he says. “We are very optimistic about 2025 and 2026 and see many opportunities.”
