Texas Data Center Construction Surges, Poised to Lead the Nation
Data center construction is booming in Texas. Favorable factors could catapult it to the lead the nation
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Texas is experiencing a significant boom in data center construction, driven by affordable land, low electricity prices, and streamlined permitting processes. By 2025, Texas is expected to rank second in the nation for data center construction, with potential to surpass Virginia, currently the leader.
- 01Data center construction in Texas has significantly outpaced overall construction activity since 2022.
- 02By the end of 2025, Texas is projected to have the second-most data center construction in the U.S., trailing only Virginia.
- 03Data centers accounted for approximately 9% of total construction activity in Texas by the end of last year.
- 04Electricity prices in Texas have remained stable, with a projected increase of about 10% due to new data centers expected between 2026 and 2028.
- 05Dallas has been ranked as the number one primary data center market globally, highlighting Texas' growing importance in AI infrastructure.
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Texas is witnessing a remarkable surge in data center construction, which is significantly contributing to the state's booming construction employment. Pia Orrenius, a senior economist at the Federal Reserve Bank of Dallas, noted that this growth is part of a broader manufacturing boom. By the end of 2025, Texas is anticipated to become the second-largest state for data center construction, potentially surpassing Virginia, known for its 'Data Center Alley.' Factors such as affordable land, streamlined permitting processes, and low electricity costs are attracting data center developers to Texas. In 2022, data centers accounted for about 9% of total construction activity, reflecting a substantial increase from previous years. While electricity prices have been stable, projections suggest a potential 10% rise in wholesale electricity prices in the ERCOT region due to ongoing data center developments from 2026 to 2028. This trend positions Texas as a critical hub for AI infrastructure, with Dallas ranked as the leading primary data center market globally.
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The growth in data center construction is boosting employment in the construction sector and stabilizing electricity prices in Texas, despite future projections of price increases.
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