Commercial Construction Market Shows Signs of Recovery

by George Waldon  on Monday, May. 30, 2011 12:00 am  

Business among the largest commercial contractors in Arkansas fell nearly 7 percent during 2010. Total revenue among the top 20 firms declined from $1.8 billion in 2009 to $1.68 billion last year.

But that performance, which follows two years of double-digit drops, can be viewed as a sign of improving conditions. Another positive indicator: Six companies in this year's list posted significant one-year gains.

(To see the Largest Commercial Contractors list, click here. A spreadsheet version of the list is available here.)

In terms of scale, revenue at Little Rock's Baldwin & Shell Construction Co. jumped 63 percent to more than $211.1 million. Powered by a strong book of education-related business, Baldwin & Shell moved from No. 4 last year to No. 3 in the state.

The company's one-year leap among the nation's roster of largest contractors was much more dramatic. Baldwin & Shell went from No. 380 to No. 241.

"I never dreamed we would rank at 241," said Bob Shell, company CEO. "That's pretty good for a little ol' bitty contractor from Arkansas to rank that high, but we sure will take it."

Shell said the company was prepared and waiting five years ago for the wave of construction projects let loose by the state mandate to improve educational infrastructure.

"At one time, we had $300 million under contract," he said. "We were set up for it. We had kind of anticipated it and planned ahead. We increased our supervision staff and office staff.

"We knew something was going to happen. We didn't dream it would be as large as it has, and it has continued."

Other big gainers on this year's list include CR Crawford Construction Inc. of Fayetteville (No. 7), 58.9 percent to $41 million; Ideal Construction Co. of Crossett (No. 8), 49.1 percent to $38.8 million; Clark Contractors LLC of Little Rock (No. 12), 332.8 percent to $27.3 million; Delk Construction Co. of Searcy (No. 17), 77.5 percent to $20.6 million; and Milestone Construction Co. of Springdale (No. 19), 62.6 percent to $18.7 million.

At the top of this year's list is Nabholz Construction Corp. of Conway with 2010 revenue of $433.1 million, which reflects a one-year decline of 3.9 percent.

On the national scene, Nabholz ranked No. 16 among contractors doing telecommunications-related construction. The firm, which does work for AT&T in a nine-state area, ranked No. 20 in this category for 2009.

Battling for Business

Doug Wasson, president and CEO of Little Rock's Kinco Constructors, said public-sector projects account for most of the work these days, especially jobs related to education.

"We're just trying to ride the storm, or whatever else you want to call it," Wasson said. "Every job counts. Margins are lower.

"We had a decent year in 2010, and we're looking pretty good for 2011. It's not going to be a banner year for us. But we're proud and happy with everything we have."

The volume of projects coming up for bid drastically diminished during the past couple years, which has ramped up the competition.

"We used to be in pick-or-choose mode because there were a lot more, bigger projects to bid on," Wasson said. "If you miss it now, it's a while before another one comes along."

Michael Belt, president of Little Rock's Progressive Constructors Inc., said the construction slowdown was testing the staying power of companies and the size of their rainy day funds.

"We've had more opportunity to bid on work in the last five months than we probably have during the two previous years," Belt said.

"There are more prospects, but the market is still slow. Every job that comes out has 12 bidders, and some of the bids are for wages. People are trying to survive."

He said there were encouraging signs with retail work beginning to come back a little along with some manufacturers looking to expand.

"Realistically, 2011 looks a little flat, but 2012 looks better," Belt said.

Progressive didn't make the top 20 list this year.

However, the company posted revenue of $10 million, a whopping 66 percent rebound over 2009.

The company has landed enough projects such as a Wal-Mart Supercenter in Cleveland, Okla., to keep plugging along until the market improves.

"We're basically living off of investments, making enough to keep the doors open," Belt said. "We're holding our cash, waiting on better times, so we're ready to make hay when the sun shines."



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