THE ENR 400 MANY TOP CONTRACTORS TAKE A CUT IN VOLUME, WATCH PROFITS SHRINK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86-00244R000200530017-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 12, 2016
• Document Release Date: January 15, 2002
• Sequence Number: 17
• Content Type: MAGAZINE

u r~
400 Approved For Rele~e 2002/02/06
The 400 largest U.S. contractors in
1970 saw a 3% decrease in their total
dollar volume for "the first time in the
eight-year history of The ENR 400.
Their 1970 awards totaled $32.4 bil-
lion, down $1.1 billion from 1969's
record year.
Foreign work dropped 9% while do-
mestic work was off less than 1%. De-
sign and construct contracts fell 10 ~,
reflecting mainly sharp declines in in-
dustrial work in the U.S. and abroad.
For the first time, domestic contract
volume of The F.NR 400 failed to grow
at a greater rate than the total U.S.
construction market, which rose about
3% last year for all work except home-
building. The slump in foreign work
accentuated the growth problems of
many of the larger firms.
The entire $1-billion decline in last
year's new business can be traced to the
fortunes of the top 25 contractors, 12 of
whom had a drop in new business.
An exception was Bechtel Corp.,
which increased its volume to $1.5 bil-
lion to take the No. 1 position. But that
was nearly 11% less than Brown &
Root's high for 1969's ENR 400. The
minimum volume of the 400 rose only
about 5% in 1970, less than half the av-
erage rise in contractors' selling prices.
Another significant change in 1970
was less concentration ?of contract vol-
Building
$100 million & up .................
$50 mil.-$99 mii . .................
Builders make greatest margin on equity
Contractor type and 1970 dollar volume
Heavy & highway .
$50 million or more in volume ad-
~iced both in rank and in dollar vol-
:CIA-RDP86-00244R000~053'~iiD1t~ majority of those with
ume within the 400. The top 10% ac-
counted for 54% of The ENR 4()0's total
contract volume compared to a 55.5P/o
share in 1969. The dollar volume
signed up by this upper 10% dropped
6% from a year ago-double the overall
decline in The ENR 400's volume. The
number of $100 million contractors was
squeezed to 55 from 62 in 1969.
These trends-lower average volume,
lower top and less concentration
within-reflect fewer big jobs available.
That happened because of a slump in
industrial construction awards (other
than powerplants) and because record
cost inflation resulted in very high
prices on jobs that were awarded while
forcing many other projects to be post-
poned or dropped.
Volume up for 67%. Two out of three
contractors scored increases in dollar
volume. Of the 131- whose volume
dropped in 1970, many are among the
leading 100.
Industrial constructors were hit hard-
est by the decline in their. market.
Twelve had less business in 1970 and
only eight saw their dollar volume rise.
With 26 industrial constructors report-
ing both in 1969 and 1970, their total
volume fell 27%.
Building contractors boosted their
number 7% to win almost half of The
ENR 400 positions.
Profits as a percent
of stockholders' equity--
Number
of companlos Low Median Hlgh
$50 million & up ................. 5
$26 mil.-$49 mil . ................. 13
$20 mil.-$24 mil . ................. 9
Building & heavy
$100 million & up ................. 4
$50 mii.-$99 mil . ................. 10
$25 mil.-$49 mil . ................. 28
$20 mil.-$24 mil . ................. . 6
9
17
45
27
9.8 22.9 42.0
1.0 10.0 48.0
3.0 25.0 52.9
1.5 6.4 29.0
1.9 19.8 50.5
2.0 16.7 66.0
4.0 9.0 30.0
0.4
1.0
0.5
1.5
30.0
21.0
20.0
20.0
78.5
60.0
138.4
165.0
volumes under $50 million dropped.
Heavy and highway contractors also
scored a.n increase in total dollar vol-
ume and the number of them winning
position on The ENR 400 increased pm-
portionatcly.
Crowded out of the 1970 roster were
23 building and heavy contractors. But
the ones that remained did more busi-
ness so their total slipped only 4%.
Eight return to top 10. Eight of the 10
largest U.S. contractors were also num-
bered among 1969's top 10. Bechtel re-
covered the No. 1 slot from Brown &
Root. Kaiser Engineers moved up to
the No. 3 position, ousting Ebasco,
which dropped to No. 23 (listed tinder
Boise Cascade). C=uy F. Atkinson-Walsh
Construction Co. jumped to No. 5 from
the No. 26 rank it held in 1969. Lum-
mus returned to the top 10 for the first
time since 1966. Carl A. Morse slipped
two notches to No. 7, and Rust Engi-
neering retains the No. 9 slot for the
second consecutive year.
Leaders pace fast growth. Growth in
dollar volume among leaders has been
tremendous over the past five years.
Bechtel's 1970 volume is 96% greater
than in 1965, despite a decline in 1969
and despite its sharply lower foreign
volume in 1970. Foreign work has often
totaled about 25% of Bechtel's volume,
but last year it dropped 7 2%.
Several of the 10 leaders have out-
paced Bechtel's growth. Kaiser Engi-
neers, United Engineers and Construc-
tors, Guy F. Atkinson-Walsh and Carl
A. Morse have each tripled their 1965
volume, although Morse had no vol-
ume increase last year. Work done
abroad accounts for more than half of
Kaiser's growth, but United Engineers
and Morse report no foreign work.
All Bechtel's work is design and con-
struct, and the other leaders, except for
three that do no design and construct,
report that about half of their contracts
are design and construct.
Domestic and foreign work lags. From
1965 to 1970, total construction con-
tracts, other than homebuilding, have
increased 53%. For that five-year pe-
riod, the total domestic volume of the
400 soared 80%.
While building awards held steady in
1970, builders, industrial constructors
and those doing both building and
heavy work saw their volume drop
1.7%. The brunt of the drop was borne
. ............
.-
m
$2
Industrial b the industrial. constructors. Their
$2Q ~~r~~~d For. Release,2002402/067:OCIA-Ri31886-001~R0002~Qr1c7tr~umefe1123.8%.
$25 mil.-$49 mil . .................
.....
$24 mil
il
0
 For heavy and highway work, total
contracts rose 15% last year. But heavy
and highway and building and heavy
contractors saw only a 1.2% increase in
their domestic volume.
More go abroad. Although foreign
work declined in 1970, the number of
contractors working abroad increased
9% to 71. European countries continue
to be the most popular with contractors
and West Germany leads in the tally of
U.S. contractors working in European
countries-
Canad.a again attracted more U.S.
contractors than any other foreign
e ~se'2002/02/0 ,: CIA-RDP86--0024
Building and 1leavy
contractors: 112 won
$13.8 billiap
country. Thirty-five contractors worked
there in 1970, compared to 27 in the
preceding year.
Most make profits. Profits were a
shade less widespread among The ENR
400 in 1970 than among 1969's top 400.
Three out of four of the 400 report
making a profit in 1970, generally bas-
ing profit on percentage of work com-
pleted. Only one irr 20 reported a. Loss.
The other 20% did not reveal whether
or not they were in the black last year,
Losses by members of The ENR 400
were most frequent among heavy and
building contractors. Nearly 10% of the
Where the 71 contractors working abroad have jobs now
1-Algeria
34-Greece
87-Pakistan
2-Angola
35-Guam
88-Panama
3-Antilles
38-Guatemala
89-Paraguay
4-Argentina
37-Guyana
70-Peru
8-Australia
38-Honduras
71-Philippines
8-Austria
39-Hong Kong
72-Poland
7-Bahamas
40-Hungary
73-Portugal
8-$elgium
41-India
74-Puerto Rico
9-Bolivia
42-Indonesia
75-Qatar
10-Bonaire Is.
43-Iran
76-Rumania
1t-Botswana
44-Israel
77-Russia
12-Brazil
45-Italy
78-San Salvador
13-Brunei
48-Ivory Coast
79-Saudi Arabia
14-Bulgaria
47-Jamaica
80-Singapore
15-Burma
48-Japan
81-Solomon Is
1B-Canada
49-5. Korea
82-Somaliland
17-Canal Zone
50-Kuwait
83-South Africa
18-Ceyfon
51-Kwajelein
84-Spain
19-Chile
52-Lebanon
85-Sudan
20-China
53-Liberia
86-Sweden
21-Colomtria
S4-Libya
B7-Taiwan
22-Congo
55-Luxembourg
88-Tanzania
23-Costa Rica
56-Malta
89-Thailand
24-Cuba
57-Malawi
90-Trinidad
25-Czechoslovakia
58-Marshallls.
91-Tunisia
26-Dominican Rep.
59-Mauritania
92-Turkey
27-Ecuador
80-Mexico
93-U.K.
28-Egypt
81-Netherlands
94-Venezuela
29--Fiji
62-New Guinea
95-5. Vietnam
30-Finland
83-New Zealand
96-Virgin ls.
31-France
84-Nicaragua
97-West Indies
92-W. Germany
85-Nigeria
98-Yugoslavia
33-Ghana
86-Okinawa
99-Zambia
General building
contractors: 192 won
$11.0 billion
contractors were operating in the red
last year.
Building contractors had the best
record, those with profits outnumbering
losses by a 31:1 ratio. 1/leavy and high-
way contractors operating in the black
outnumbered those in the red by a 16:1
ratio, a ratio matched by the industrial
contractors.
Profit trends were well mixed last
year. Of the 264 reporting their 1969-
70 profit trend, less than one-half (122)
had an increase, including five who
turned around from red ink in 1969 to
black in 1970. But profits dropped for
...Europe attracts the most contractors
(match country codes with table at left)
Bechtel -4,5,8,12, 16,18,19,22, 25,30,37,32, 41,42,43,49, 54,59,60,61, 63,68.71,76, 79,81,83,93,
94.99 Brawn 8 Root -2,5,7,11, 12,16,21,26. 28,36,38,43, 48,50,54,60, 61,64.65,66, 68,69.70.74,
75,79,83,84, 93,9x,95 Kaiser Eng. -4,S,i0,12. 16,32,33,45, 46,47,60,63, 70,73,89,93,94 Daniel -
7,8,16,26, 31.32,55,73. 74,84,93 Atkinson-Walsti -5,16,47, 84,93 Rust Eng. -4,8,14,16, 31,32,4G,42,
45,48,36,80, 67,72,73,92, 93.98 Lummus-12,16,19,30, 31,32,41,43, 48,49,60,61, 71.77,83,87, 93,94
Parsons -3,5.16,32, 43,48,60,68, 71,83.97,93 Fluor -5,9,12,16, 19,32,36.49, 60,61,62.63.
61,70.74,83, 87,93,94 Dravo -4,5,16,32, 36,45.48, 74,92 Morrlson-Knudsen -5,9,12,76,
19,25,31,37, 42,43,49,62, 67,87,97,95 Foster Wheeler -1,2,4,5, 8?12,16,31, 32.45,46,48, 73,89,92,93
Kellogg-4.5,12.16, 19,21,31,32, 43,48,49,61, 67,74,80,92. 93,94 J.A. Jones -9.21.23. 74,95 Klewlt
-16 Austin -4,5,8,16, 31,32,45,61, 84,93 Boise Cascade-1.8.76.31, 41,48,79.93 Arthur McKee -
4,$,8,12, 16,79,27,31, 32.45,60.61, 84,9'?_,94,98 Blount -47 Dillingham -5,76,35,49, 62.63,89 War-
ren Bros. -t6,8a Proton -5,6,12,13, 16,27,31,49, 61,84,89,93 Braun -5,8,16,32. 48,61,93
McDermott -5,16,42.43, 50,60,65,75, 79,80 Swindell-Dressler -5,12,16. 31,60,61 Gllbane -21
Donovan -16 Stearns-Roger -16,44,92 Centex-Bateson -74 Perlnl -16.,67 Geo. A. Fuller -60,74
Raymond -32,45,47,53. 54,65,74,90, 93.94,95 Catalytic -8,16,31,32, 61,72.93 Webb -38 Koppers
-84,92 Vlnnell -35.60,67,71, 80,69,95 HRH -74 Bfaw-Knox Chem Plants -12, 7 6,32. 48.93,94 Rich
-74 $clentlflc Design -31,48,60,61, 76.84,87,93 Jacobs -75,70,78 US Industries -t2 Amelco -
5.17,35,37, x2,49,66,71, 82,87 Zurn Eng. -27,49.64 Cunningham-Limp -8.16.32, 34,84 Zachry -
58,67,74 Leaved -53,85 Pritchard -7,6,43, 63,98 Howard Wright -16 Blythe Bros. -74 Const. Ag-
gregates -3.76.47,74 H.C. Price -5,16.31,32, 43,61,80.93 Garrlts -3,96 Yaksh -74 Sanderson &
Porter -7,12,43,47, 53,64,71, 79,95 Ballenger -23,74 Stolte -49 Burns 6 Roe -5,16,34,41,
51,60,66,79, 83.84,87,92 Crawford 8 Russell -8,61,93 Delta Eng. -4,16,54 Intercounty Const. -96
First Florida Bldg. -t 6 Franchl -52 Burgess -29 Elchleay -16 Reed & Martin -35,49.51 Oman -5
Teer-36,38,57, 64,88 Carpentertaros. -17,47 Harbert-23,27,47 Nat Harrison-24,36,74
Approved For Release 2002/02/06 :CIA-RDP86-002448000200530017-9
April B, 1971 ENR 47 i+'
 UUll uC;1J Lllal 111VCJt a I11 t;Ulall .~1L,V VV lJUI. auanaaa.a 1al.uvr uuu u~ur?uy vv .
per $1 million of contracts. tractors (between $20 million and $24
The ratio of ec ui went nrrchascs to_ million) bought much less per dollar of
'20Qla~pt~~v~lur~~~1~~tTQ~~~Q~~~iQiQl~~~an their counterparts dicl in
Design-construct 30% of work.
of contractor. Builders with $100 nul- 1969. Their 1970 median dropped to
lion or more awards have a, median in- $27,000 per $1 million of awards,
vestment of $2G,000 per million of con- though all but a few had substantial
tracts, while those with :~20 to $24 1969-70 increases to show in their con-
million in awards invest a median tract volume.
$16,000 per million. - Smaller building contractors upped
Machinery and truck purchases in their buying; the largest reduced it in
1970 by heavy and highway con- 1970. Median new investment jumped
tractors tended to increase per dollar of to $31,000 per $1 million of cont.?acts
76, or one out of four, while 19 reported new awards.. Those awarded $25 mil- for builders awarded $20 million to $24
a lass (compared with 17 losers among lion or more had a median new in- million. In the higher brackets, hoty-
the 1969 top 400). Profits held steady vestment of $52,000 per million of con- ever, median purchases fell sharply be-
forone out of five. tracts, markedly above 1969. low 1969 values.
Profit gains were most common
among contractors doing heavy and. _~.
building construction and industrial
constructors. In both groups, twice as
many firms had higher profits as had
their profits reduced. Among building
contractors and those contractors doing
heavy and highways, the profit gainers
outnumbered three to two firms report-
ing declining profits in 1970.
Falling profits hit contractors hardest
in the $20 million to $24-million
bracket. A little over one-half of them
had drops in profits or suffered losses
last year. Most of these contractors were
firms doing building only or the combi-
nation of building and heavy construc-
tionwork.
For the 177 members of the 400 re-
porting their profit margins, pretax
margin on stockholders' equity in the
business ranged from next to nothing
for some to over 100% for three
builders. Half of all the companies re-
porting their margins scored a 20% or
better pretax return in 1970. However,
about one out of eight made less than
5% before taxes.
Building contractor members of the
400 had the best rate ~of return on
equity in 1970, as 55 out of 98 reported
a return of 20% or more. Heavy and
highway contractors had the next best
record. About one-half of them made
20% or more and only about 10% failed
to make a 5% return on investment be-
fore taxes.
By contrast, only 20 out of 48 report-
ing contractors doing building and
heavy construction had a return as
good as 20%, while one out of six didn't
make as much as 5%.
Equipment investment high. Members
THE
400
Construction specialty
1970 contracts Gen'I Mfg.,
in $ millions High- build- process Do
Total Foreign Heavy way " ings plants design
1.
Bechtel Corp., San Francisco, Calif ....................................
1,579.0
94.0
2.
Brown & Root, Inc., Houston, Tex ......................................
1,344.6
187.5
3.
Kaiser Engineers Div., Kaiser Industries, Oakland, CaliF......
1,084.3
499.9
4.
Daniel International Corp., Greenville, S. C ........................
730.2
76.4
S.
Guy F. Atkinson-Walsh Const., So. San Francisco, Calif.....
720.5
131.8
8.
United Engineers & Constructors, Inc., Philadelphia, Pa.....
660.0
0
7.
Carl A. Morse, Inc., New York, N. Y ....................................
606.4
0
8.
Turner Const. Co., New York, N. Y ....................................
590.2
0
8.
The Rust Engineering Co., Pittsburgh, Pa ..........................
563:6
272.6
10.
The Lummus Co., New York, N. Y ......................................
530.0
400.0
11.
Tishman Realty 8 Const. Co., New York, N. Y ....................
527.2
0
12, The Ralph M. Parsons Co., Los Angeles, Calif ..............:.....
504.7
19fi.1
13.
Fluor Cerp., Los Angeles, Calif ..........................................
488.7
215.3
14.
Dravo Corp., Pittsburgh, Pa ...............................................
444.0
104.9
15.
Morrison-Knudsen Co., Inc., Boise, Idaho ..........................
428.1
158.0
18.
Foster Wheeler Carp., New York, N. Y ................................
395.0
186.0
17.
Stone & Webster Eng. Corp., Boston, Mass ........................
391.1 a
n.r.
18.
Chicago Bridge & Iron Co., Oak Brook, III ..........................
381.0
n.r.
19.
The M. W. Kellogg Co., Houston, Tex .................................
350.0
n.r.
20.
J. A. Jones Const. Co., Charlotte, N. G ..........................(a)
343.4
27.6
21.
Peter Kiewit Sons' Co., Omaha, Neb ..................................
342.2
45.0
22.
The Austin Co., Cleveland, Ohio ........................................
336.8
93.1
23.
Boise Cascade Corp., Boise, Idaho ................................(b)
321.0
72.0
24.
Arthur McKee & Co., Cleveland, Ohio ................................
297.0
155.0
25.
Blount Bros. Corp., Montgomery, Ala ..............:..................
296.0
0
26.
Dillingham Corp., Honolulu, Hawaii ....................................
289.1
78.4
27.
Warren Brothers Co., Cambridge, Mass .............................
278.3
28.8
28.
Proton, Inc., Des Plaines, III ..............................................
266.8
212.6
29.
C. F. Braun 8 Co., Alhambra, Calit .....................................
256.0
140.0
30.
Huber, Hunt 8 Nichols, Inc.. Indianapolis, Ind ....................
244.0
0
31. The Badger Co., Inc., Cambridge, Mass .............................
230.0
160.0
32.
S. J. Groves 8 Sons Co., Minneapolis, Minn .......................
221.1
0
33.
J. Ray McDermott 8 Co., Inc., New Orleans, La ..................
215.0
n.r.
34.
Swintlell-Dressler Corp., Pittsburgh, Pa ..............................
200.0
n.r.
35.
Gilbane Building Co., Providence, R. I ....................:..........
197.4
0
38.
Donovan Const. Co., St. Paul, Minn ...................................
182.3
7.3
37.
Stearns-Roger Corp., Denver, Colo ....................................
179.4
31.1
38.
Gust K. Newberg Const Co., Chicago, IIL ..........................
160.8
0
38. Gibbs & Hill, Inc., New York, N. Y ......................................
160.0
0
40.
Robert E. McKee, Inc., EI Paso, Tex ...................................
146.4
0
41.
Centex Corp.-J. W. Bateson Co., Inc;., Oallas, Tex ..............
145.9
14.5
42.
Perini Corp., Framingham, Mass ........................................
143.5
9.0
43.
Darin & Armstrong, Inc., Detroit, Mich ................................
143.3
0
44.
George A. Fuller Co., New York, N. Y .................................
137.5
0
45.
Pittsburgh-Des Moines Steel Co., Pittsburgh, Pa ................
134.1
0
48.
Ernest W. Hahn, Inc., Hawthorne, C+?lif ...............................
131.5
0
47,
Raymond International, Inc., New York, N. Y ......................
131.3
60.6
48.
Catalytic Const. Co., Philadelphia, Pa ................................
126.8
44.8
49.
Manhattan Const. Co., Muskogee, Okla .............................
126.6
0
/ /
/ /
/ /
/ /
/ ~ ~ / /
/ / / / /
/ /
/ /
4f The ENR 400 have more than a $2.4- Figures include prima construction contracts, shares of joint ventures and subcontracts. Parent tom
pony's total Includes subsidiaries. Design-construct contracts Included at erected value of plant includin
billion investment in machinery and heavy tnstafled equipment.' ENR??reported. Excludes Joint ventures, subcontracts, projects outside th
trucks at current replacement value. u.s. n.r, not reported
Heavy and highway contractors have (a) Includes Wllllam L. Crow Const. Co., Chas. H. Tompkins Co., Rea Const. Co.
$1 rr~llion~d#~co~nt~ra~ctsoompa~e~dS~t~00~1'~d~~g~~?-F~~~=~I~~~~~~~0530017-9