Electrical Contractors NAICS 238210

Nov 10, 2025 - Steady Growth for Power Projects After 2025

• Demand for electrical contracting may get a boost beginning next year amid growing thirst for electricity. North American construction and engineering spending for power projects in 2026 is expected to rise 4% after anticipated flat growth in 2025, according to FMI’s fourth-quarter 2025 North American Engineering and Construction Outlook. Amid demand from data centers, electric vehicle adoption, and electrification in manufacturing, electricity consumption is expected to see average annual growth of 5% through 2028, according to the US Energy Information Administration. To support rising demand, power infrastructure investments are expected to rise 9% in 2027, 7% in 2028, and 4% in 2029.
• During a webinar in October, Associated Builders and Contractors (ABC) chief economist Anirban Basu warned of tightening conditions for the U.S. construction industry, with rising interest rates, material costs, and financing challenges threatening project viability, according to Construction Dive. While data center construction remains strong, driven by investments in AI infrastructure, other sectors, such as commercial, manufacturing, and public infrastructure, are cooling due to tariffs, saturated markets, and dwindling government funding. Contractors outside the data center space report shrinking backlogs and reduced deal flow. The expiration of federal infrastructure funding in 2026 may further dampen demand.

• Home remodeling spending is expected to remain stable for the rest of this year and through mid-2026, according to the Leading Indicator of Remodeling Activity (LIRA) report released in October by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 1.9% to $511 billion in the fourth quarter of 2025, compared to Q4 2024. In the first quarter of 2026, remodeling spending will reach $524 billion, up 2.4% from Q1 2025. Spending will then moderate to $519 billion in Q2 2026, up 2.1% from Q2 2025. In the third quarter of 2026, year-over-year spending is forecast to rise 1.9% to $517 billion. While solid remodeling permitting activity and gradually improving single-family home sales will support remodeling activity, potential headwinds include continued weakness of housing starts and economic uncertainty.
• In September, OpenAI announced $1 trillion in investments for building out data centers to power increasing global demand for its ChatGPT generative AI chatbot, according to The Wall Street Journal. OpenAI estimates it will need 20 gigawatts of computing power as the number of weekly global ChatGPT users has climbed to more than 700 million. At a cost of $50 billion per gigawatt, OpenAI, and its partners Oracle and Japan-based Softbank, will need to spend at least $1 trillion for computing infrastructure. In addition to a Central Park-sized computing warehouse complex under construction near Abilene, Texas, OpenAI is building a similar site in New Mexico with Oracle. Other, smaller complexes will be in Austin, Texas, and Lordstown, Ohio. Another site in an as-yet-unnamed location in the Midwest is also in the works.