EC&M Top 50 Electrical Contractors Battle for Business in Tough Market Environment

Sept. 25, 2009
Notwithstanding the beginnings of a decline in non-residential construction following the housing sector’s fallen house of cards, revenue for electrical and datacom services reported by the firms on this year’s Top 50 electrical contractors list remained steady, with a total of $13.3 billion.

Notwithstanding the beginnings of a decline in non-residential construction following the housing sector’s fallen house of cards, revenue for electrical and datacom services reported by the firms on this year’s Top 50 electrical contractors list remained steady, with a total of $13.3 billion.

However, only a few firms on the listing, which appeared in the August issue of Electrical Construction & Maintenance magazine and is available at www.ecmweb.com, experienced significant revenue gains, which were boosted by ample backlogs and the closeout of large projects.

Of the 40 firms present on EC&M’s 2008 Top 50 list, 30 experienced year-over-year gains in revenue, yet less than half declared a gain of more than 10 percent. In addition, only eight of these firms reported increases in electrical and datacom sales of more than 20 percent from 2007 to 2008, with San Jose, Calif.-based Rosendin Electric (No. 2) in the lead with a 63 percent jump in sales, followed closely by FSG Electric (No 18), Austin, Texas, with a 57.5 percent increase. Additionally, drops in revenue were also tempered. Of the 10 firms that revealed a decrease in revenue from 2007 to 2008, only three reported drops of more than 20 percent. These moderate highs and lows combined led to an overall average increase of 9.1 percent over the disclosed totals for 2007.

Despite dire predictions for the health of the electrical construction industry in 2008, only five of 48 firms indicated they did not meet revenue expectations that year, while 16 reported meeting revenue goals and 27 disclosed they exceeded revenue expectations. The electrical contracting firms that met or exceeded revenue expectations credited strong markets and existing backlogs in those markets most often as factors that influenced financial results in 2008.

The markets in which the Top 50 firms report being most active include commercial, health care and industrial, with the least active markets comprising VDV and home networking, general manufacturing and security. In addition, a few Top 50 firms expanded their electrical services group to include maintenance. For instance, EMCOR acquired MOR PPM, Inc. (PPM), Society Hill, S.C., a privately held industrial maintenance company with 2008 estimated revenues of approximately $80 million.

Many of the firms plans to enter or expand their presence in the renewable energy arena. For example, the wind generation group of Libertyville, Ill.-based Aldridge Electric (No. 15) began building wind projects in Utah, Kansas, Illinois, and New York. “Expanding into the wind industry has been a natural and obvious growth path for Aldridge,” says Ken Aldridge, owner and CEO. “The company has more than 50 years of experience installing most of the components that make up a wind farm.”

Although active in the renewable energy market for quite some time, Rosendin Electric began pursuing solar for utility-scale projects in 2008. “We have recently set up a preconstruction Solar Task Force to assist developing REI’s strategy to attack this market,”says Steve Scates, regional VP. “Several of our customers active in wind project development are also developing solar projects. We intend to leverage our experience and relationships with these customers to gain opportunities on their upcoming solar projects.” —Beck Ireland, EC&M magazine