AGC General Contractors Expect Solid 2025 Growth in Data Centers and Power Projects

Construction contractors are optimistic about certain private-sector segments and have high hopes for most types of public-sector work, according to survey results recently released by the Associated General Contractors of America (www.agc.org) and Sage Construction. Yet they have very low expectations for several private-sector market segments, according to AGC/Sage’s A Year in the Balance: The 2025 Construction Hiring and Business Outlook.

“2025 offers quite a few bright spots for the construction industry even as the outlook for some private-sector segments remains quite dire,” said Jeffrey Shoaf, the association’s chief executive officer in the press release on the report. “Firms expect regulatory relief will help drive demand and they will continue to hire, when they can, and boost investments in technologies, particularly artificial intelligence.” 
The net reading — the percentage of respondents who expect the available dollar value of projects to expand compared to the percentage who expect it to shrink — is positive for 15 of the 17 categories of construction included in the survey. The highest net reading, 42%, is for data centers.

Contractors are also very bullish about the prospects for water and sewer projects, with a net reading of 35%, and for power projects, with a net reading of 32%. They also are bullish about healthcare construction, with a net of 27% for non-hospital healthcare facilities, such as clinics, testing facilities and medical labs, and 24% for hospitals.

Survey respondents are largely positive as well about manufacturing plant construction, with a net reading of 25%. Contractors are also optimistic about the education sector with a net reading of 13% for kindergarten-to-12th-grade schools and 12% for higher education construction.
Five other segments have readings ranging from moderately positive to negative. The net reading for warehouse construction is 14%, while the reading for multi-family construction is 12%. Contractors have a slightly positive net reading for lodging (7%) while net readings for private office construction (-3%) and retail projects (-5%) are negative.

Association officials noted that contractor expectations are high for transportation and nfrastructure projects such as airport and rail projects (29%) and bridge and highway work (24%). The reading for federal contracts, for agencies such as the General Services Administration and the U.S. Army Corps of Engineers, is 22% while public buildings drew a moderately positive net reading of 14%.
“One reason contractors have a relatively positive outlook for many public sector market segments is that more contractors are starting to see the effects of increased federal investments in infrastructure,” said Ken Simonson, the association’s chief economist, in the press release. He noted that 18% of respondents worked on new federally funded infrastructure projects, double the 9% who said that was the case a year ago.

The survey said construction firms are also leveraging technology to address industry challenges such as labor shortages and productivity demands. Artificial intelligence leads the way as the technology with the biggest anticipated increase in investment, cited by 44% of firms. Other key areas for increased investment include document management software (40%); accounting software (36%); and project management software (35%).

“AI’s potential to revolutionize construction workflows is driving increased interest and investment,” said Dustin Stephens, global head of construction, Sage, in the release. “Leading construction businesses are utilizing advancements in AI, cloud, and mobile technologies to operate more efficiently and tackle complex projects with greater agility.”