by Mark Hengel
Posted 3/17/2008 12:00 am
Updated 1 year ago
The 2007 market for mechanical and electrical subcontractors in Arkansas held fairly steady from 2006. The trends are changing, though, and while the central Arkansas market is still chugging along, subcontractors are using the word recession to describe the northwest market.
Topping this year's list of electrical subcontractors is Koontz Electric Co. Inc. of Morrilton, while the top spot on the mechanical subcontractors' list still belongs to Multi-Craft Contractors Inc. of Springdale. Multi-Craft also reported the largest jump in net revenue for the mechanical list, bumping up to $49 million in 2007 from $42 million in 2006.
Electrical list newcomer Miller Electric Co. reported the largest increase for both lists. The company - based in Jacksonville, Fla., but with an office in North Little Rock - had 2007 revenue in Arkansas of $11.6 million, up from $5.4 million in the state in 2006 and enough to earn the No. 5 ranking for electrical subcontractors.
All revenue totals are self-reported and are not verified.
Comfort Systems USA (Arkansas) Inc. was No. 2 on this year's mechanical list, and President Clyde Jester said 2007 was a record year for the firm. The company's revenue stayed at about the same level as 2006, $31 million, but Jester said profitability before taxes jumped 41 percent.
Comfort Systems got its hands on larger projects like the Crystal Bridges Museum of American Art in Bentonville. The larger projects are insulating the Little Rock firm from the general downturn in the market, Jester said.
"We are in a recession, and the market has been affected by that," he said. "But I see another record year [in 2008]. We've been blessed by a number of large projects."
Dropping to No. 3 on the mechanical list was Nabco Mechanical & Electrical Subcontractors Inc. of Conway. Robert Unwer said the firm's two divisions capitalized on a backlog of projects going into 2007.
The projects have now tapered off, but he projects a stable market in central Arkansas for the next two years.
"There still appears to be a strong health care market," he said. He also said the central Arkansas market for multifamily dwellings like condos should remain strong in coming years.
Aviation has also provided a boost to the firm. Nabco is the electrical and mechanical subcontractor for both the Supermarine of Arkansas LLC fixed-based operator construction and the Dassault Falcon Jet Corp. expansion at the Little Rock National Airport.
Business at Nabco's northwest Arkansas office is another issue, Unwer said.
"That market has definitely been feeling a recession-type atmosphere," he said.
Unwer expects one market to expand, though, he said.
"We are starting to see some money for education," he said. Money provided by the Arkansas Department of Education's Partnership Program is funding new school construction, he said. Schools are also attempting to bring older buildings up to codes established by the department.
The market for electrical contractors in northwest Arkansas has weakened of late, said Robert Killion, executive vice president of the Arkansas division of Marrs Electric Inc.
Marrs' 2007 revenue, $8.4 million, was off by more than 20 percent from the previous year. Killion said a larger number of contractors are bidding on a smaller number of projects, resulting in slimmer margins.
Killion said he expects the construction slowdown to continue through much of 2008.
Dean Hoover, vice president and chief operating officer of Koontz Electric, said the firm has shifted its business away from government work during the past years. Government contracts normally make up about 75 percent of their work, he said, but recent stalemates in Washington, D.C., have stalled many projects the firm has with the U.S. Department of Energy and the U.S. Army Corps of Engineers.
"Many of our clients are working without approved budgets," he said.
The Morrilton firm has shifted its focus to the private industrial sector to make up for the loss, Hoover said. The firm is currently working on the new LM Glasfiber complex at the Little Rock Port Authority.
He estimated that the industrial work now makes up about half of Koontz's workload.