Louisiana's Top 75 Contractors
Contractors suffer 8 percent drop in revenue, but some markets improve

By Sam Barnes

Overall declines in revenue of nearly 8 percent were suffered by this year's Top 75 Contractors, but the news is not all bad.

In light of the stagnant industrial construction market, perhaps the most surprising gains were from industrial contractors Jacobs Engineering Group and Performance Contractors Inc., both of Baton Rouge.

The companies boosted their annual revenues by $71 million and $51 million, respectively, over 2002.

In the building market, The Lemoine Co. LLC of Lafayette launched itself into the top builder's position with a 70 percent gain in revenue, or $43.4 million, over the previous year.

Also of note:

• Landis Construction Co. LLC of Jefferson became a Top 10 builder by nearly doubling its revenue, rising from $34.5 million to $67 million.
  
• James Machine Works Inc. of Monroe became a Top 10 industrial contractor thanks to a 114 percent revenue improvement, rising from $6.9 million to $14.7 million.
  
• Other big percentage gainers included builders Don M. Barron Contractor Inc. of Farmerville and BAS Construction Co. Inc. of Rayville, and highway contractor Denton-James LLC of Baton Rouge.
  
• Boh Bros. Construction Co. LLC of New Orleans is in three of the four Top 10 breakout lists. The company is the state's largest transportation contractor, the second largest public works contractor and the seventh largest industrial contractor.
  
• Turner Industries of Baton Rouge retains its position as the state's top industrial contractor
  
• C. R. Pittman Construction Co. Inc. of New Orleans retains its position as the state's top public works contractor
  

Of course, the list showed more declines than gains, mostly by small to mid-sized contractors.

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Fortunately, McGraw-Hill Construction is predicting a slight increase, or 1 percent, in total construction activity nationwide for 2004. A 1 percent increase would translate into $508.9 billion in total construction spending for 2004, up from 2003 spending of $505.6 billion.

"I do think that the worst of the commercial correction has taken place and we're now poised for some improvement, but the timing is uncertain," said Robert Murray, McGraw-Hill Construction's vice president of economic affairs. "It may not show up fully in the first half of 2004, but by the time we get to the latter half of 2004 and into 2005, it should be there."

Economists are projecting a 4 percent growth rate in gross domestic product for 2004.

"This hesitant expansion we've been seeing does seem to be getting legs," said Murray. "This expansion finally seems to be taking hold."

He was quick to point out, however, that two factors could potentially damage the economic outlook over the next year - the unemployment rate and tepid level of business investment.

"We need to see a pickup of employment to sustain momentum," and job creation tends to lag the pattern of the economy, he said.

Despite the fragility of the current economic climate, there is reason for optimism in 2004, in part because the construction industry has weathered the economic storm of the last few years "pretty well," Murray added. Across sectors, spending was "in retreat, but not collapse," he said.

One sector where marked improvement is expected is income properties, such as offices, hotels, stores and multifamily housing. McGraw-Hill Construction is predicting a 9 percent increase in spending from $92.9 billion in 2003 to $100.9 billion.

"This is a sector that responds to the overall economy," Murray added.

Engineering News-Record's "Top 400 Contractors List," a nationwide survey published in May, was used also to locate any additional contractors that may have "slipped through the cracks." In fact, five of the Louisiana-based companies that qualified for Louisiana Contractor's rankings were also on the ENR list. The companies and their corresponding ENR rankings are as follows:

Developing the list. While researching for the Top Contractors ranking, Louisiana Contractor asked contractors to submit revenue figures for the calendar, not fiscal, year. They must also have had a permanent office in Louisiana the entire year. Contractors also included a breakdown of the types of construction their work was concentrated in. Categories include general building, industrial/process, manufacturing, water supply, sewerage/waste disposal, transportation, hazardous waste and power.

The information was arranged within two separate lists - one ranking all contractors with a permanent Louisiana office according to their in-state revenue only, and the other ranking all Louisiana-based contractors according to their total revenue. By distinguishing between the two, we were able to more accurately determine the major players in the state's construction market.

Also included are Top 10 breakout lists for the major market sectors, including transportation, industrial/manufacturing, building and public works.

During the research phase, various methods were used to accumulate the necessary information. Initially, survey forms were e-mailed and mailed to general contractors throughout the state, then were followed up with phone calls or faxes.

Useful resources:

For up-to-date national forecast information, go to: http://www.construction.com/ResourceCenter/forecast/2004Jan.asp