Dive Brief:

• A ranking of the largest U.S. specialty contractors released this week shows continued growth for firms that perform work such as mechanical, electrical, plumbing and HVAC. The firms on this year’s ENR Top 600 Specialty Contractors list generated combined revenue of $135 billion in 2018, up 9% over 2017 and 20% from 2016.
• As a group, the companies' revenue more than doubled since market recovery began in 2011, said ENR senior editor Gary Tulacz during a webinar last week announcing the rankings.
• Webinar panelists whose companies are on the list talked about ways they are recession-proofing their businesses, even though they haven't experienced direct headwinds yet. One strategy the contractors said they are employing is cultivating relationships with owners to tap into a long-range pipeline of work. "Making sure we have a good line of sight on what our owners' and developers' needs look like coming up is very very important to success," said Matt Englert, senior vice president at Rosendin Electric. 

Dive Insight:

The contractors on the panel agreed that the last few years have been profitable. Mike Kotubey, North Texas president of Dallas-based mechanical contractor TDIndustries, said his firm has been busy with several big projects in Texas and Arizona — five over the last six years — that each brought in $75 million or more.

"While challenging, they offered us a solid, reliable backlog that allows us to plan for labor and resources," he said.

TDIndustries recently wrapped up the last of the five projects and unfortunately, Kotubey said he doesn't see any more massive jobs on the horizon. 

"There's still a lot of projects coming through, but instead of megaprojects, they are in the $10 million to $40 million range," he said. "From our perspective that makes planning more unpredictable."

Kotubey said he sees some projects his firm works on becoming "stressed" by economic pressures. "Our competition right now isn't necessarily from other contractors, it's the proforma for the projects we work on."

Dave Leathers, executive vice president of service for Pittsburgh-based MEP contractor Limbach, said his firm is focused on cultivating relationships with GCs and owners to ensure a steady pipeline of work.

"We're transitioning the business to have more of an owner-direct focus," he said. "We're developing relationships with both builders and owners and want to be known as a full-service company that can also manage a project after the fact."

Englert agreed, saying his firm is also focusing a lot of attention on owners. "That's who is spending the money and who has a vested interest in getting the projects done."

It's not uncommon to get a last-minute call about a $75 million project, Englert said. "They'll say that if you can show up with a team tomorrow you can have it," he said, which is not ideal in the labor-strapped environment.

Limbach leadership wants to move the firm away from scrambling for these types of projects and instead work with owners to better understand their projects for months and years into the future.

"We work on finding out what their needs are going to look like and where they plan to have projects, so we can start putting together a strategy," he said. 

The top 10 specialty contractors on the ENR list, which ranks firms by construction revenue, are:

• Quanta Services, Houston
• Emcor Group Inc., Norwalk, Connecticut
• Mastec Inc., Coral Gables, Florida
• Brandsafway, Kennesaw, Georgia
• API Group Inc., New Brighton, Minnesota
• Henkels & McCoy Group, Blue Bell, Pennsylvania
• Rosendin Electric, San Jose, California
• Comfort Systems USA Inc., Houston
• Keller North America, Hanover, Maryland
• MYR Group Inc., Rolling Meadows, Illinois