Government Report: Steady cashflow keeps the government sector strong

Jim Haughey, Director, Research and Analytics, Reed Construction Data -- Building Design & Construction, 7/1/2007 12:00:00 AM

Construction spending for government buildings—excluding housing, education, and healthcare—expanded 14% in the fiscal year ending in June 2007. This is acceleration from the 4% growth in the prior fiscal year.

Spending for public safety buildings has been growing the fastest, but is projected to grow somewhat slower in the coming months. Still, spending will remain significantly higher than project cost inflation.

Government buildings are constructed when the cash for contract or bond payments is available, and cash is currently abundant. The 2006-07 fiscal year began with aggregate state government budget reserves equal to more than 9% of annual expenditures, nearly equal to the 10%-plus peak five years earlier. Budget reserves had fallen to 2-3% of spending just past the end of the last recession.

Sub-par economic growth over the last year will drop budget reserves in many states, but not by enough to cancel or delay projects already started or committed.

Top 20 government design firms
(2006 billings in $ millions)

Firm	Billings
Source: 2007 Giants 300 survey Note: This ranking is based on firms that made the Giants 300 list.
1. Jacobs Engineering Group	212.51
2. URS Corp.	152.00
3. CH2M HILL	135.35
4. HOK	126.90
5. Carter & Burgess	109.18
6. Parsons Brinckerhoff	94.87
7. HNTB Architecture	76.26
8. DMJM H&N	74.75
9. Burns & McDonnell	70.77
10. STV Group	57.60
11. Merrick & Co.	40.18
12. CUH2A	37.64
13. Hayes, Seay, Mattern & Mattern	30.63
14. Heery International	27.87
15. Mead & Hunt	27.07
16. Teng Affiliated Cos.	25.93
17. HDR Architecture	24.23
18. KlingStubbins	24.18
19. Baker and Associates	22.90
20. Syska Hennessy Group	21.72

Top 20 government contractors
(2006 revenue in $ millions)

Firm	Revenue
Source: 2007 Giants 300 survey Note: This ranking is based on firms that made the Giants 300 list.
1. Fluor Corp.	1,754.82
2. Clark Group	1,527.04
3. The Turner Corp.	1,489.32
4. Perini Corp.	813.39
5. PCL Construction Enterprises	774.30
6. Jacobs Engineering Group	680.32
7. Balfour Beatty Construction	611.55
8. Hoffman Construction	510.57
9. Hensel Phelps Construction	468.81
10. Gilbane Building Co.	370.77
11. Skanska USA Building	342.00
12. Hunt Building Co.	312.26
13. M. A. Mortenson Co.	309.39
14. JE Dunn Construction Group	256.20
15. Dick Corp.	228.90
16. The Whiting-Turner Contracting Co.	223.93
17. Manhattan Construction	204.15
18. Walbridge Aldinger	198.00
19. Bovis Lend Lease	185.56
20. Coakley & Williams Construction	184.11