Construction Machinery Manufacturers NAICS 333120

Jan 7, 2026 - Caterpillar's Growth Fueled by Generators for Data Centers

• Caterpillar is riding a surge in data center construction as power-hungry AI projects drive unprecedented demand for on-site electricity generation, making its power and energy division the company’s fastest-growing segment, according to The Wall Street Journal. Data center developers are turning to Caterpillar for hundreds of natural-gas generators as strained grids push data center builders to produce their own power. The boom has lifted Caterpillar’s stock, spurred its largest factory investments in 15 years, and is expected to accelerate annual sales growth by 5% to 7% through 2030. Although analysts warn of parallels to the dot-com bubble, Caterpillar says that early planning with customers provides it with clearer visibility into long-term demand. Power generation sales jumped 22% in 2024, and the company is expanding engine capacity while supporting massive AI-driven projects that require gigawatts of electricity, specialized cooling systems, and dedicated service crews.
• Demand for building design services declined in November from the prior month, marking the thirteenth consecutive month of weak architectural billings, according to a December report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 45.3 compared to October's reading of 47.6. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 51.4 in November from 54.8 in October, and the new design contracts index dropped to 42.7 from 47.1. The AIA’s Chief Economist, Kermit Baker said, "Weakness in business conditions at architecture firms continues to be widespread, with declining billings across all major specializations and in every region except the Midwest. However, inquiries for new projects continued to increase, and design activity at firms in the Midwest – a region that traditionally has had a disproportionate share of manufacturing activity – appears to have hit its bottom for this cycle and is expected to continue to improve."

• The total value of construction starts in November fell 20.5% compared to October, according to Dodge Construction Network. Nonbuilding construction starts declined 43.7%, led by a 70.4% drop in miscellaneous nonbuilding starts and followed by weak activity in utilities (-61.4%) and highways and bridges (-4.9%). Nonresidential building construction starts decreased by 13.4% in November compared to the previous month, as office and data center starts dropped 40.5% and hotel starts declined by 33.2%. Commercial segments that posted growth in November included parking garages (+32.1%), retail stores (+8.3%), and warehouses (+6.4%). Institutional starts grew 11.4% as gains in public and educational building starts offset declines in amusement and dormitory starts. Manufacturing starts remained volatile in November, declining 50.7% from October levels. Residential starts grew 13.3% in October, with single-family starts rising 3.1% and multifamily starts up by 35.6%.
• Construction firms that work on civil infrastructure projects are holding steady as they manage uncertainties, including waning backlog growth and stagnant margins, according to FMI’s fourth-quarter Civil Infrastructure Construction Index (CICI) survey. The CICI reading for the fourth quarter was 50.6 compared to 50.8 in Q3 2025 – on a 100-point scale. Any CICI reading above 50 indicates that more civil infrastructure contractors see conditions as good than poor. About half of civil infrastructure contractors reported that their backlogs in Q4 met or exceeded their targets. However, most noted that public projects are making up a growing share of overall backlogs, as private-sector projects face greater uncertainty. Contractors expect backlog growth to slow over the next few quarters as more firms vie for a narrower set of public projects. Contractor margins remained steady but flat in Q4 2025 as bid competition and rising cost pressures eroded pricing power.