Electrical Contractors NAICS 238210

Mar 13, 2026 - Data Centers Outbid Residential Developments

• The rapid growth of artificial intelligence is fueling a data-center construction boom, which increasingly crowds out other types of land development, according to The Wall Street Journal. The trend is reshaping construction markets and increasing demand for specialized electrical work as data center developers outbid housing builders for land across several US regions. In Northern Virginia, data centers accounted for 20% to 30% of land development between 2013 and 2021, with activity from 2022 to 2024 rising 50% above the previous nine years combined. Tech companies are paying record prices for land, including a $700 million purchase by Amazon for property originally acquired for about $50 million. For the electrical contractor industry, the surge in data center construction is driving strong demand for large-scale power systems, cabling, and electrical infrastructure. Developers say a single facility can require more wiring than entire housing developments, intensifying competition for electricians and shifting construction activity toward energy-intensive commercial projects.
• Rising US demand for electricity will mostly be driven by increases in utility-scale solar generation, according to the US Energy Information Administration (EIA). Solar generation is forecast to increase 17% in 2026 and another 23% in 2027. Much of the growth will be in Texas, as the amount of solar electricity supplied to the grid by the Electric Reliability Council of Texas (ERCOT) is expected to increase from 56 billion kilowatt-hours (BkWh) in 2025 to 106 BkWh in 2027. Total US utility-scale solar generation is forecast to rise from 290 BkWh in 2025 to 424 BkWh by 2027. Solar's share of total US electricity generation capacity is forecast to rise from 7% in 2025 to 8% in 2026 and 9% in 2027.

• Construction spending for nonresidential buildings is expected to remain sluggish in 2026 and 2027, according to the American Institute of Architects’ (AIA) Consensus Construction Forecast released in January. Total spending for nonresidential building construction is expected to rise just 1% in 2026 and 2.2% in 2027. For the next two years, commercial facility growth will be led by data centers, with spending rising 26.3% in 2026 and 16.5% in 2027. However, offices are expected to see a sharp decline in spending over the forecast period, while warehouse and retail will see weak growth this year and modest gains in 2027. Manufacturing construction spending will fall 3.9% in 2026 and drop 2.8% next year. Spending on institutional projects will grow 2.7% this year and 2.8% in 2027, led by steady growth in the health sector, but educational, and amusement and recreation project spending will remain relatively flat.
• A nationwide fiber-optic construction boom, fueled by federal broadband funding and soaring data-center demand, is running into a severe labor shortage that threatens to slow high-speed internet expansion, The Wall Street Journal reports. Contractors say the biggest constraint is a lack of skilled workers for roles such as drillers, splicers, foremen, and aerial linemen. Retirements and rising demand are projected to create a shortage of 178,000 workers by 2032, according to a report by the Fiber Broadband Association and the Pommer Communication Contractors Association. Wages are climbing quickly, with some crews seeing pay rise 5% to 8% annually and experienced specialists earning well above statewide medians. Training programs and aggressive recruiting are expanding, but companies still struggle to hire and retain workers as competitors poach talent.