Texas Construction Firms Face Labor Squeeze as Data Centers Compete for Workers

Texas Construction Firms Face Labor Squeeze as Data Centers Compete for Workers

Texas construction firms are losing skilled trade workers to data center projects and immigration enforcement at the same time, according to a San Antonio Express-News report drawing on the Associated General Contractors of America’s annual Construction Workforce Survey.

AGC surveyed 70 Texas respondents and found labor availability is the industry’s central challenge in the state: 87% reported unfilled hourly craft openings and 80% have salaried openings unfilled. Electricians and pipefitters/welders were named as the hardest trades to recruit, and half of respondents said available candidates aren’t qualified for the work. Data center projects are directly competing for the same workforce, AGC members told the paper, offering higher wages that pull tradespeople away from housing, infrastructure and conventional commercial builds.

Immigration enforcement is compounding the shortage. Ken Simonson, chief economist at AGC, told the Express-News that enforcement activity “has caused some people to be detained or deported and kept others away from job sites where that might happen.” The Texas AGC survey found 45% of respondents experienced at least one direct or indirect effect of immigration enforcement, higher than the roughly one-third reported nationally. Builders say fewer workers showing up has stalled projects, particularly residential, adding pressure to housing supply and prices.

Firms are responding with higher pay, expanded training budgets, digital recruiting and school partnerships. San Antonio general contractor Nunnelly said it has nearly doubled its training spend since COVID. Gov. Greg Abbott’s office has also introduced Jobs and Education for Texans grants and a Texas Jobs Council to expand vocational pipelines, while community college systems like Alamo Colleges report electrical, plumbing and welding trade enrollment climbing sharply since 2024.

What It Means for Subcontractors

• Data center construction is now a direct wage competitor for the same electricians, pipefitters and welders that pipeline, oilfield and industrial subcontractors need — firms bidding in Texas should expect tighter crew availability and upward wage pressure on these trades regardless of sector.
• With 45% of Texas AGC respondents reporting immigration-enforcement effects on crew availability, contractors relying on immigrant labor pools should build schedule contingency into bids and communicate proactively with crews about worksite expectations.
• Firms investing early in training pipelines and school/community-college partnerships, as AGC members describe doing, are best positioned to backfill retiring trade workers before the shortage deepens further.