Utility System Construction
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 17,700 utility system construction firms in the US are specialty contractors that develop buildings, structures, and distribution networks associated with water, sewer, petroleum, gas, power, and communication systems. Firms provide new construction, reconstruction, rehabilitation, and repair services. Companies may specialize in a utility sector or offer services across multiple utilities.
Difficult Work Site Conditions
Utility construction projects can involve complex site conditions, including difficult to reach terrain and underground locations.
Seasonality and the Weather
Seasonal demand for utility system construction services creates uneven cash flow.
Industry size & Structure
The average utility construction firm employs 36 workers and generates about $9 million in annual revenue; the average water and sewer line construction firm employs 15 workers and generates $4 million annually; the average oil and gas pipeline construction firm employs 103 workers and generates about $27 million annually; and the average power and communication line construction firm employs 44 workers and generates about $12-13 million annually.
- The utility system construction industry consists of about 17,700 companies that employ 579,000 workers and generate about $158 billion annually.
- The oil and gas pipeline segment and the power and communications segment are concentrated at the top with the 50 largest firms representing 64% and 59% of the segment's total revenue, respectively. The water and sewer segment is more fragmented with the 50 largest firms representing just 20% of the segment's total revenue.
- The utility system construction industry includes several large players with national to near-national scope, regional firms, and many small independent firms that often serve as subcontractors to larger firms and operate within a limited geographical market.
- Large companies include MasTec, Dycom Industries, and Granite Construction. Some large firms have international operations.
Industry Forecast
Utility System Construction Industry Growth
Recent Developments
Mar 17, 2025 - Solar, Battery Storage to Lead 2025 Electricity Generation Growth
- US electricity generation capacity additions in 2025 are expected to be led by solar and battery storage projects, according to the US Energy Information Administration (EIA). The US is projected to add 63 gigawatts (GW) of generating capacity in 2025, led by utility-scale solar with 32.5 GW, followed by battery storage (18.2 GW), wind (7.7 GW), and natural gas (4.4 GW). Additions in Texas (11.6 GW) and California (2.9 GW) will account for nearly half of the solar capacity additions in 2025. Other states that are expected to have significant upticks in solar additions in 2025 include Arizona, Florida, Indiana, Michigan, and New York.
- On March 12, the EPA said it aims to roll back many regulations related to air, water, and waste that affect power plants, according to Utility Dive. However, research firm Capstone suggests that current and future litigation could prevent any changes from going into effect before the next presidential administration. The EPA intends to take interim steps to reduce regulations sooner, including a possible two-year exemption for power facilities impacted by EPA mercury and air toxin standards while the official rulemaking policy plays out. The EPA also hopes to reconsider several other power-related regulations, including ambient air quality standards for soot, a rule that regulates ozone from drifting into other states, regulation of how coal ash is handled, and power plant effluent rules.
- North American construction and engineering spending on power projects in 2025 is expected to grow by 7% after increasing an estimated 10% in 2024, according to FMI’s first-quarter 2025 North American Engineering and Construction Outlook. Demand is being driven by increased electricity consumption from manufacturers, and power-hungry data centers that support AI, cloud computing, and quantum computing. Data centers currently account for about 3% of US electricity consumption but are expected to rise to 5% by 2030. To meet growing demand, power providers are delaying the phasing out of older generation facilities and taking steps to modernize the grid. Tech companies are making investments in microgrids, nuclear, and battery storage power to help meet their data center needs. Construction spending in the power sector is expected to slow to 3% annual growth in 2026 and 2% in 2027 before rising slightly to 3% in 2028.
- Soon after taking office, President Trump signed several executive orders, including a pause on federal permitting for land-based and offshore wind projects, according to The Wall Street Journal. The administration’s moves have created uncertainty for future wind projects, although work is continuing for land- and ocean-based projects already underway. Offshore wind, which requires permitting in US-held waters, faces the most uncertainty. However, while most land-based wind development is on private property, projects may need permits from agencies ranging from the Army Corp of Engineers to the Bureau of Land Management, which creates opportunities for the executive branch to create friction. The offshore wind industry faced significant setbacks before Trump’s election, including inflation, supply chain headaches, and high interest rates.
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