What Large Contractors are Saying About the Construction Market

With all of the buzz about a potential recession, we decided to look into the earnings results and forecasts for large construction companies to see how they are faring and what it could mean for the state of the industry. 

While Granite, Tutor Perini, Fluor and Skanska are bullish on what’s to come in 2023 thanks to new project awards, growing backlogs and an influx in federal funding from the infrastructure bill, the industry continues to be negatively impacted by inflation, supply chain disruptions, labor shortages and delayed project starts.  

Here’s a breakdown of the results. 

Granite Construction Company

Granite Construction Company, a full-service general contractor, construction management firm and construction materials producer headquartered in Watsonville, California, reported a net loss for the second quarter of 2022, ended June 30. Total revenue decreased by $67 million to $768 million compared to $835 million in the same period last year.

Construction revenue decreased by 11.4% to $632.3 million compared to $713.4 million in 2021. Unanticipated cost increases on complex, old-risk projects dragged down results in the Central region, while delays in project starts impacted revenue for the California group, the company says.

Meanwhile, price increases in both aggregates and asphalt offset volume decreases for Granite, boosting revenue for the materials segment by 12.2% for the quarter. Materials revenue was $136 million compared to $121.2 million last year.

Granite says it is placing a strategic focus on its core competencies as a civil construction contractor and materials producer to improve performance.

“Although our results were impacted by the old risk portfolio (ORP), gross profit was reduced in the quarter by losses in the ORP along with energy and fuel cost inflation. The ORP are challenging jobs, and we’re working hard to mitigate the remaining risk,” said Granite President and CEO Kyle Larkin. “The good news is that we can see the end of these jobs approaching.”

Despite the decrease in revenue compared to the same period last year, Granite did not revise its financial guidance for the full year.

Looking ahead to 2023, the passage of the infrastructure bill should bode well for Granite, but Larkin says the company’s success will depend on its ability to attract talent at all levels, from craft to project executives.  

“We’ve seen a historically tight construction labor market become even more competitive as we emerge from the pandemic. The current labor environment is the most challenging I’ve seen in our industry,” said Larkin. “With the rollout and funding of the infrastructure bill, our future success and growth will hinge on our ability to continue to attract the skilled workforce to meet the labor challenges for all of the expected opportunities.”        

Tutor Perini

Tutor Perini, a civil, building and specialty construction company headquartered in Los Angeles, reported $0.9 billion in revenue for the second quarter of 2022, a decline from $1.2 billion posted in the same period last year.

The company said its results were impacted by reduced project execution activities and the lingering impact of the pandemic, which delayed bidding and new project awards during 2020 and much of 2021. Net loss for the second quarter of 2022 was $63 million compared to net income of $31.2 million for the second quarter of 2021.

“We continued to generate strong operating cash in the second quarter of 2022, which enabled us to achieve a record operating cash result for the first six months of 2022. To put this in perspective, through mid-year we have already generated operating cash that is larger than any full-year result since the merger in 2008, and we continue to expect that operating cash will be strong for the rest of this year,” says Ronald Tutor, chairman and CEO.

An increase in backlogs and new project awards has the company optimistic about the future. Significant new awards and contract adjustments in the second quarter of 2022 included:

  • $293 million of additional funding for a mass-transit project in California
  • $95 million for an educational facility project in California
  • $85 million for a military housing project in Alaska
  • $313 million for various military projects in Guam

The company also expects to benefit significantly over the next several years from funding provided by the infrastructure bill.

“We also experienced a solid quarter of new awards, which contributed to year-over-year backlog growth of 14%, and with a large volume of prospective near-term opportunities, we anticipate that we will see even more robust backlog growth over the next several quarters,” Tutor added.

Despite the large upcoming projects, Tutor Perini has withdrawn its earnings guidance for the remainder of the year due to uncertainty related to ongoing disputes. Regardless of the outcome of any potential project settlements, the company now expects a net loss for 2022.

“Unfortunately, certain settlements, legal decisions and unfavorable project adjustments adversely affected our second quarter earnings. However, we are encouraged by the progress we continue to make in resolving disputed matters and collecting significant amounts of associated cash,” says Tutor.


Irving, Texas-based engineering and construction firm Fluor posted an 11% decrease in revenue to $3.3 billion from $3.7 billion during the same period last year. Profit for the quarter was $108 million compared to $95 million in the second quarter of 2021.

While Fluor is strategically focused on regional infrastructure work, the company says it will continue to be selective in its future pursuits. Negotiating firm fixed-price commitments from subcontractors and suppliers and swift contract execution to lock in rates will be critical in mitigating cost overruns for long-term projects. Recent awards included $547 million for the I-35 Capital Expressway South project in Austin, Texas.

“Our new awards for the quarter demonstrate that clients are moving forward with capital spending plans in a challenging business environment,” says David Constable, chairman and CEO of Fluor. “Although I am disappointed with the performance to date on a few legacy infrastructure projects, our strategic priority to pursue contracts with fair and balanced terms continues to drive a healthier backlog with as-sold margins above our expectations.”

The company continues to see significant inflation pressure on materials and labor. During the company’s August 5 earnings call, Constable told participants, “Across the infrastructure landscape there are clear signs of cost inflation. At Fluor, we see cost escalation in fuel and commodities, such as rebar. On large contracts, we reduced our fuel risk by entering into fuel hedges. While we’ve not seen inflationary pressure on labor, we are planning for this and have included the currently identifiable amounts in our forecasts.”

Despite a 6% drop in backlog, Constable is optimistic about the future. Second-quarter new awards were $3.6 billion compared to $1.7 billion a year ago.

“We’re really encouraged by the new awards in Q2 and what we’ve already seen in Q3. It’s not slowing down at all,” says Constable. “In a recessionary environment, at least a technical recession, we feel good about our new awards. We historically perform well in a recessionary environment, and we’re seeing that now.”

Perhaps the most promising segment for the contractor is related to the global energy transition. “Nearly 40% of our new awards this quarter directly related to energy transition. More specifically, we are currently executing energy transition front-end projects that total $38 billion in potential future work across our segments, and we are pursuing another $28 billion of front-end prospects in that space,” says Constable.

Fluor has tightened its 2022 adjusted guidance with expectations that revenue will be similar to the 2021 fiscal year.


Skanska, a multinational construction and development company based in Sweden, saw revenues rise to SEK 44.8 billion ($4.3 billion), an 18% increase when adjusted for currency exchange rates compared to the second quarter of 2021.

Construction division revenues amounted to SEK 39.7 billion ($3.8 billion) in the quarter, compared with SEK 32.4 billion ($3.1 billion) during the same period last year. The operating margin for the construction division fell to 3.4% compared to 4.7% in 2021.

“In construction, revenue is growing across all geographies as the strong order backlog is transferred into ongoing projects. Activity is high in the construction industry, but inflation will continue to remain challenging for the market,” said President and CEO Anders Danielsson. “We continue to focus on selective bidding and commercial management. The healthy margin delivered in the second quarter is a testament to the strength of our strategy.”

In the U.S., Skanska anticipates a strong market for civil construction due to federal funding and a stable market for non-residential construction over the next 12 months. Backlogs continue to increase, with Skanska citing a 96% book-to-build ratio and 19 months of production.

“The civil market is overall stable in Europe and strong in the U.S.,” says Danielsson. “Residential development is seeing a softened market. We can see as inflation and interest rates go up, the structural shortage levels will stabilize over time. Cost escalation might lead to projects being postponed in the market.”