A new report from the University of Virginia’s Weldon Cooper Center for Public Service says Virginia’s economy is expected to grow modestly through the end of the year. However, job losses are also still expected.
“It seems like we hit rock bottom with the federal decline,” said Joao Ferreira with UVA’s Weldon Cooper Center talking about how federal cuts impacted Virginia through the end of 2025. But fears that those impacts would last have dissipated as employment levels in Virginia’s federal sector have leveled off.
And according to Ferreira's quarterly economic analysis of the Commonwealth published Wednesday, some sectors are doing well, like retail and wholesale. Others, like professional services and manufacturing are not doing so well, with job losses in the thousands expected.
One standout metric from the report: construction jobs, long a growing space alongside Virginia’s booming data center industry, slowed more than expected this summer and they’re expected to see more decline. Ferreira’s not sure why, but he has some ideas.
“Data centers are locating in other parts of the U.S. now. What’s delaying more is the constraints in the electricity grid and the transmission lines," Ferreira told Radio IQ. "That may be more impactful now than localities delaying projects.”
According to Dominion Energy, there’s about 54 gigawatts of contracted power capacity expected from data centers in the coming years, up from 16.5 gigawatts in 2023. According to recent reporting from Virginia Business, about 27 gigawatts of new power is expected to come online in the next seven years.
Charles Skelly runs IEBW 666, the central Virginia electrician's union that helps build data centers in the region. He’s expecting another record year for his workers, but some projects are getting delayed or starting later than expected.
His guess why?
“It’s hard to know for certain," Skelly said Tuesday. "It could be supply chain issues, it could be construction scheduling issues or the argument at the General Assembly over the taxes [on data centers].”
Neither Skelly nor Ferreira said local moratoriums were impacting the data center industry yet. But changes to how data centers pay for power and power generation could impact future projects.
