Midwest Construction Boom Strains Labor Pool as Data Centers Rise
Data center construction and power generation projects are driving a construction boom across the Midwest, but contractors warn labor shortages could soon outpace demand, ENR Midwest reports.
Market Impact
Chris Anvik, regional president of McCarthy Building Cos., says data centers have made the Midwest “one of the nation’s premier data center hubs,” built on cheap power, fiber access and available land. That growth is now spilling into power generation, with solar, battery storage and natural gas facilities expanding as aging coal plants retire. McCarthy alone has more than 15 power projects under construction in its Central region, including a dual-fuel conversion at Ameren Missouri’s Audrain Energy Center in Vandalia, Missouri, and hyperscale data center builds in Wisconsin and Missouri.
Terracon Consultants reports similar demand across digital infrastructure, energy and transmission, transportation and health care. “Data centers have been keeping many offices very busy,” says Don Dracon, the firm’s senior vice president of client development, pointing to solar, wind, battery storage and transmission line work filling schedules.
The labor picture is tightening fast. Anvik estimates the St. Louis metro area could see three to five times as many large projects over the next five years compared to the prior decade, and warns the region could face a shortage of roughly 10,000 electricians and pipefitters within 12 to 18 months. Burns & McDonnell CEO Leslie Duke says owners are shifting toward design-build and EPC delivery to manage risk amid “tight labor availability, renewed continued price volatility and global uncertainty escalated by the Iran conflict.” She cites research projecting design-build and EPC will account for nearly half of all U.S. construction spending by 2028, more than $500 billion annually.
What It Means for Subcontractors
- Electricians and pipefitters in the St. Louis metro area should expect heavy bidding activity over the next 12 to 18 months as McCarthy and others race to cover a projected 10,000-worker gap; firms with certified crews available on short notice will have leverage on rates.
- Subcontractors bidding data center and power work in Wisconsin and Missouri should prepare for compressed schedules and prefabrication requirements, since McCarthy is expanding offsite prefab and opening a 17-acre St. Louis Solutions Center in Maryland Heights, Missouri, this fall to support self-perform and prefab operations.
- Firms pursuing EPC or design-build subcontracts should get on GC pre-qualification lists now. Duke’s data shows design-build/EPC could represent $500 billion in annual U.S. construction spending by 2028, meaning more work will flow through fewer, integrated contract packages rather than traditional bid-build.
- E&I and mechanical contractors should track solar, battery storage and natural gas plant conversions like the Audrain Energy Center project in Vandalia, Missouri, where dual-fuel upgrades signal ongoing retrofit work at existing power assets, not just greenfield builds.
- Companies without workforce development partnerships should consider aligning with union locals or trade schools now. Burns & McDonnell’s new Houston construction academy and McCarthy’s community labor partnerships show larger primes are already locking in pipeline talent ahead of the crunch.
