US construction labor is tilting toward data centers as overall building spending falls

The 86,000 figure counts a whole category, and data centers are one part of it. Business Insider's number covers nonresidential specialty trade contractors, meaning electricians and other trades working on non-residential buildings, data centers included ^[2]. The link to data centers comes from an economist's judgement. "I think it's fair to say that a very large portion of construction labor demand right now is being driven by increasing data center construction activity," said Zach Fritz, an economist at Associated Builders and Contractors ^[3]. The board-deck version says data centers added 86,000 trades jobs. The record supports a narrower claim: the category grew by 86,000, and Fritz credits one sector with a very large portion of current labor demand.

That concentration matters to anyone else hiring electricians. An operator building anything that needs trades now hires from a pool whose tightness moves with one sector's capital budgets. The American Institute of Architects expects data centers to reach only about 8% of nonresidential building spending by 2027 ^[4]. KPMG calls data centers a "structural growth driver" for construction spending ^[7]. Business Insider notes that AI infrastructure still depends on "a slice of hardcore spenders" ^[12].

The reporting does not include wage data, so any case for pricier labor has to be built from demand. Lightcast found that average monthly postings for electrical engineers in the utilities sector rose 34% between January-to-August 2022 and the same months this year, and postings for project management specialists rose 22% ^[11]. About half of this year's data-center posting demand on Indeed came from two groups: IT infrastructure, operations and support, and installation and maintenance ^[10].

Guy Berger, a senior fellow at the Burning Glass Institute, is worried the boom cycle will be shorter than expected. "And all of a sudden, we trained a lot of electricians, people like that, to do stuff that is no longer needed," Berger said ^[8]. Fritz's answer is about timing. "The next few years, it's stable. It's going to keep growing. We're going to keep building data centers," he said ^[13]. He named rising community opposition and smaller technical footprints as possible limits on growth, then added: "They're not going to happen anytime soon" ^[14]. Both can be right. Berger's concern is how long the cycle lasts. Fritz's confidence covers the next few years.

The hiring data may make the demand look more durable than it is. Aubrey Woessner, an economist at Indeed Hiring Lab, said only about two in every 1,000 data-center postings are temporary ^[16]. That means roughly 99.8% carry a permanent label ^[1]. She said the label should not be taken at face value: "'Permanent' is a label the employer chooses, and there's reason to think it may overstate how durable these roles really are: Local incentive agreements often require a project to create a set number of permanent positions, which gives employers a reason to post that way regardless of how long a given build-out job actually lasts," Woessner said ^[17].

The trade-off this quarter is between securing crews and carrying the risk if demand drops. Multi-year crew agreements or in-house apprenticeship pipelines would lock in electricians through the few years Fritz calls stable ^[13]. The same commitments become fixed cost if the cycle ends early, as Berger fears ^[8]. In that case the fallback market for those trades would be the rest of construction, where spending is already contracting ^[5].