Dive Brief:
- The subcontracting and specialty trade business is booming. According to the Engineering News-Record's recently released Top 600 Specialty Contractors list, the group had 2014 revenue of $93.2 billion, up $5.6 billion from the year before and more than the pre-recession figure of $87.07 billion in 2008.
- Acquisitions, led by Quanta Services — number one on the list — and Safway Group, accounted for some of the growth in revenue among contractors in the Top 600, but, according to the ENR, a growing market and a strong backlog of work as long as 18 months are also driving organic growth for specialty contractors.
- Competition is fierce among specialty subcontractors eager for gains after a prolonged recessionary period of losses, but there is concern among some more established subs that less experienced contractors are taking on more work than they can handle, according to the ENR.
Dive Insight:
Over the past five years, the subcontracting sector has seen steady growth and reached a level of stability that has given some contractors acquisition opportunities as well as the chance to grow through an uptick in available work.
"We are always looking for good firms that could provide value to us, but we prefer to grow organically," said Anthony Guzzi, CEO of EMCOR Group.
However, even though subs are reporting project lead times of up to 18 months, Guzzi cautioned that the industry needs to be prepared for anything.
"The market is growing, but with all the turmoil in the world, there could be an abrupt shift. I think we have all learned to live with that possibility," he said.