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Highway and Street Construction Industry Profile Excerpt
| SIC Codes: 1611, 1622, 8741 NAICS Codes: 2373 Page Length: 10-12 Last Quarterly Update: 11/3/2008 View Sample Industry Profile |
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In the US, about 10,000 companies provide highway and street construction services, with combined annual revenues of about $70 billion. Large companies include APAC and divisions of large construction companies like Bechtel and Kiewit. The industry is fragmented: although a few companies have a large regional or national presence, 70 percent of the market is held by companies with fewer than 250 employees. A typical company has $5 million of annual revenue and fewer than 50 employees.
COMPETITIVE LANDSCAPE
Demand is largely driven by the availability of government roadbuilding funds. The profitability of individual companies depends on operating efficiencies and the ability to correctly estimate costs. Big companies have the resources and engineering skills necessary for large construction jobs. Small companies can compete effectively by bidding for smaller projects or by working as subcontractors on large projects. The work is capital-intensive: annual revenue per employee is about $200,000.
This is largely a local business with few economies of scale or technical complexities to encourage consolidation. Most contracts are fairly small and local marketing is important in acquiring them.
PRODUCTS, OPERATIONS & TECHNOLOGY
Nationally, road construction work consists 55 percent of new construction, 30 percent of alterations or reconstruction, and 15 percent of maintenance and repair. The US has about 1.5 million miles of unpaved roads, and 2.5 million miles of paved roads. New street and highway construction can involve complicated engineering, and skilled operations like earthmoving, grading, and bridge, curb, ...
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