Whether smooth or choppy waters lie ahead, five years of changing conditions have made West Coast specialty contractors more adept at navigating whatever comes next. Even as they face cost volatility, tariff concerns and hesitant owners, companies continue to see opportunities ahead.
“The first two quarters of the year were filled with uncertainty and general apprehension,” says Lawrence Clark, president and CEO of Clark Bros. Inc., a Fresno, Calif.-based high-voltage electrical and heavy civil contractor. He says renewable energy developers have been particularly cautious despite the “blatant demand” for additional power to service the acceleration of AI and data center build-out.
Clark sees some of that concern thawing, and “we’re very optimistic about the overall direction of the construction market for the next two to five years,” Clark says. “Both private developers in the renewable energy space and municipal asset managers seem very aware and ready to attack the largest state of our infrastructure in the western US”
BT Mancini is helping to build the Gateway of the Pacific parking structure, part of the large science and technology campus south of San Francisco.
Photo courtesy of BT Mancini
At the Rebound
Across the region, the outlook for specialist contractors has improved significantly. The top 10 companies on ENR West’s list of specialty contractors reported total revenue of $6.29 billion by 2024, nearly 17% more than the total of the top 10 companies in 2023. This is a significant change from last year, when the top 10 specialty contractors in the region reported a 4% decline compared to 2022 revenue.
Total revenue for all companies in the region grew 9.8% in 2024 to $10.4 billion, up from $9.5 billion a year earlier. Nevada and the legacy California region (California and Hawaii) showed lower but still strong growth of 8% and 6.7%, respectively, while the legacy Northwest region (Alaska, Oregon and Washington) led the way with a 25% increase in revenue.
Despite the optimistic figures, companies remain cautious.
“The market has stagnated, but we expect to see growth,” says Nick Mancini of BT Mancini Co., a 60-year-old company that supplies and installs architectural products, structural systems and commercial flooring in Northern California and Northern Nevada.
“We’re watching interest rates, unemployment rates and construction costs closely, especially how tariffs affect materials prices. These factors will determine whether we see the increase we expect or whether we want more of the same,” he says.
The fare cuts should open the door to busier times, Mancini says, adding that “we’re positioning ourselves to be ready.”
Cloudy forecasts
This balancing act—preparing for a raise while navigating cautious clients—is echoed in other specialties, where cost pressures continue to hold back decisions.
Michael Gallagher, president emeritus of Western Allied Corp., a 65-year-old specialty mechanical contractor based in Santa Fe Springs, Calif., says cost pressures remain. Higher prices and shattered consumer confidence, he says, “have also caused many private developers to delay the activation of projects as final costs are uncertain and [they are being] took as a hostage [factors] beyond the developer’s control.”
Gallagher warns that “uncertainty is one of the worst market conditions [and] it’s always been the biggest obstacle to real estate development of all kinds.” Still, he says, “people can adapt to some degree to almost any kind of market conditions.”
Even as developers deal with current uncertainties, contractors face an uncertain future, with Gallagher saying that “a key issue over the next decade will be the integration of AI into both the trades and the building controls industry.” So far, he says, the verdict has been mixed. “It’s a promising tool, but let the buyer beware. He doesn’t know what he doesn’t know.”
One bright spot in this decade’s turmoil is that Gallagher is less concerned about an aging workforce. The pandemic corrected the course, as construction continued to operate while other sectors shut down. Young people took notice and “our local learning classes are significantly larger,” Gallagher says. “The demographic problem in retirement is not the problem we anticipated 10 years ago.”
