R.S. Mowery gets back to form in '12General contractor cracks $100 million in revenue
After three fairly lean years in a challenging economy — under $45 million and just above $53 million in revenue for 2010 and 2011 — R.S. Mowery & Sons Inc. rode recovery in the construction industry to $101.25 million in 2012.
Developer need for new warehouse inventory to respond to business and industry demand, along with renewed building interest in other sectors, helped drive those numbers, said Donald Mowery, president of the Silver Spring Township-based construction company.
"2012 was a nice pickup for us. We built our backlog back up," Mowery said, citing strong demand in higher-education, health care and senior-living facilities, as well as warehouse development.
Last year, R.S. Mowery built a $40 million warehouse for California-based Panattoni Development Co. in the Key Logistics Park in Penn Township, Cumberland County.
That 1.4-million-square-foot facility was completed in November and is home to London-based home and personal care products distributor Unilever.
"Warehousing is a big segment for us," Mowery said.
During the peak years of 2006-08 — R.S. Mowery posted more than $122 million in revenue in each of those years — the company built a lot of speculative warehouses. Mowery estimated that it built about 5 million square feet during that span.
Most of that spec space is for real estate investment trusts, or REITs, which want the available inventory to attract big tenants looking at a particular market, Mowery said.
"Developers want new inventory," he said, citing interest both locally along Interstate 81 toward Chambersburg and outside the region in areas such as Allentown and Hazleton.
The Cumberland County firm also has been active on the Susquehanna University campus in Selinsgrove in recent years, Mowery said. The company worked on a $20 million science center and $10 million student housing project.
"2013 looks like it will be up there again," Mowery said of company revenue.
He said the company will continue to place emphasis on its core markets.
"I believe we will stay true to the business model. For the last 20 years, it's been a pretty reliable model," he said.
He concedes that larger projects will continue to be harder to find, but said the smaller contracts — medical offices and other corporate use facilities — are out there.
The challenges are financing projects because of low appraisals, Mowery said, which is driven by a lack of comparable sales. Distressed sales might play a role in that.
"The selling of real estate is down, but the cost of new building is not," he said.
Stormwater management requirements are driving cost increases, he said.
The seasonally adjusted annual rate of construction spending was $866 billion in November, which was 7.7 percent above the previous year, according to the U.S. Census Bureau.
Nonresidential construction spending was up 2.9 percent over the year, the January report said.
On the employment side, the construction industry added 30,000 jobs in December, led by an increase of 13,000 jobs in building construction and 12,000 in residential specialty trade contractors, according to U.S. Department of Labor.
R.S. Mowery by the numbers
1925: Year the company was founded.
75: Number of employees.
100: The company primarily operates within 100 miles of Harrisburg.
$160.31 million: Company revenue in 2007, sales peak.
$101.25 million: Company revenue in 2012.