Texas construction firms facing labor squeeze amid data center boom, immigration crackdown
Texas construction firms are facing a severe labor shortage, exacerbated by a booming data center industry that offers higher wages and draws workers from other sectors. Despite some city council members proposing a moratorium on data center development, the San Antonio City Council ultimately rejected the idea, opting instead to focus on tightening zoning and land-use regulations to manage these facilities. Government entities and educational institutions are working to promote trade programs to address the broader construction labor deficit.
Texas construction firms are experiencing a significant labor shortage, with 87% of companies reporting hourly craft openings and 80% having salaried openings, according to the Associated General Contractors of America (AGC) annual Construction Workforce Survey. This shortage is attributed to factors like negative stereotypes about construction work, historical underinvestment in vocational training compared to college prep, and an aging workforce.
The booming data center industry in Texas is intensifying this labor squeeze, as data center projects offer higher wages and attract skilled workers like electricians, pipefitters, and HVAC specialists from other construction sectors such as housing and infrastructure. Companies like Oracle have publicly stated their need for thousands of construction workers for their data center campuses. This competition is leading to project delays across the industry.
In response to the rapid growth of data centers, some San Antonio City Council members had proposed a moratorium to pause new data center development. However, the council rejected the moratorium in August, choosing instead to focus on refining local zoning, land-use rules, and Unified Development Code amendments to manage these power-intensive facilities. Industry representatives, such as Lauren Mandel, president of the San Antonio AGC, argued that a moratorium would be detrimental, as data centers are a significant source of job creation in the current construction market.
Efforts to address the overall labor shortage include increased investment in training by firms like Nunnelly, a San Antonio general contractor, and government initiatives. Governor Greg Abbott has launched the Texas Jobs Council and awarded grants to support career and technical education programs. Additionally, community colleges like the Alamo Colleges District are expanding vocational training programs, with growing enrollment in electrical, plumbing, and welding trades, aiming to expose students to construction careers earlier and provide pathways for workforce entry.