Population Growth Powers Up Market

Sindhu Avalokita, senior vice president of sales at Jacobs, says, “Infrastructure sectors—particularly water, transportation and energy—have provided the most consistent opportunities across the Mountain States and Southwest largely due to above-national-average population growth, climate conditions and ongoing public investment.

“Water continues to be a leading sector for us, as drought conditions, aging infrastructure, growth pressures and regulatory needs are driving investment in treatment, conveyance, reuse and system reliability,” she adds. “Because water systems are essential for communities, we are seeing these projects move forward even when other development slows.”

Jacobs is the design-build firm on the $267-million San Juan Lateral Water Treatment Plant in Sheep Springs, N.M., for the U.S. Bureau of Reclamation. Construction broke ground in spring 2025 and is expected to be completed by 2028. Jacobs will handle O&M for 12-24 months post construction, then turn the plant over to the Navajo Nation and Navajo Tribal Utility Authority by 2030, according to a Jacobs spokesperson.

Jacobs is building the $267M San Juan Lateral Water Treatment Plant in New Mexico.
Aerial imagery courtesy of Archer Western

“Projects like this show how technical rigor and trusted partnerships come together to solve complex water challenges at large scale,” says Span Tummuri, Jacobs’ water market growth director. “Working alongside the Bureau of Reclamation, tribal leaders and our delivery partners, we’re strengthening water resilience for the region and building a system that will reliably serve communities for generations.”

“Industrial facilities tied to water systems, power delivery, advanced manufacturing and other mission critical functions are continuing to move forward because they support long-term regional needs and economic stability,” adds Avalokita.

And while the transportation sector is active, “we see funding constraints influencing how projects are prioritized. Higher construction costs, limitations on state and local funding and uncertainty around future revenue are certainly forcing agencies to focus on preservation, safety and operational improvements rather than major expansions,” Avalokita says.

“Meanwhile, the cooling in some sectors such as commercial office, multifamily, mixed-use development and other private development that we’re seeing reflects not necessarily a lack of demand, but a strategic recalibration by owners who are concentrating capital on infrastructure investments that are essential, fundable and resilient in any economic cycle. Funding and attention are shifting to water, transportation, energy and other mission critical systems that directly support resilience, economic growth and basic services. These projects offer clear public benefit and alignment with federal and state funding programs rather than large, speculative expansions,” she contends.

Avalokita adds: “We expect investment to remain concentrated in water, transportation, energy and other critical infrastructure, driven by continued population growth, regional water scarcity, extreme weather, and the sheer scale of the region. Owners will continue to prioritize projects where needs are well defined and tied to long-term system reliability and public benefit.”

Taiwan Semiconductor Factory

Image courtesy TSMC

Leading this year’s list of Top Starts is the third phase of the Taiwan Semiconductor Manufacturing (TSMC) plant in Phoenix, part of a massive $65-billion investment for the initial three-fab complex, with the total site expanding toward a $165-billion, six-fab megacampus.

TSMC is the biggest direct foreign investment ever made in the U.S., and Fab 3 will make the world’s most advanced microchip, the 2-nanometer chip, the manufacturer says. These chips provide a 10% to 150% boost in computing speed and use less energy, TSMC says.

TSMC’s expanded investment is expected to support 40,000 construction jobs over the next four years and create tens of thousands of high-paying, high-tech jobs in advanced chip manufacturing and R&D, according to the firm.

Supportive Infrastructure

In Salome, Ariz., McCarthy is constructing the next two phases of the $398-million Centennial Flats 500-MW project, which includes a battery energy storage system. McCarthy broke ground on Phase 1 in 2024. The current phases kicked off in February 2025, with completion anticipated for July of this year.

“Because solar energy and storage facilities are being constructed rapidly and efficiently, many entities are recognizing the benefit of adopting these forms of power generation as effective solutions to increase energy production for their communities and utilities,” says Chris Nickle, president of McCarthy Building Cos. Southwest region.

“We’re seeing the most emphasis and growth in critcal infrastructure areas, including energy, water and aviation,” Nickle says. “Water in the West is also a major area of concern due to ongoing drought conditions, which threaten surface water sources. Many water purveyors in the region are looking to water reuse solutions and advanced water purification technologies to help ensure that they can continue providing clean water to current and future businesses and residents.”

“Given funding constraints, we can expect to see an increased emphasis on cost certainty, constructibility and risk management,” Avalokita says. “As delivery partners, we’re being asked to get involved earlier in program strategy and management to advise, help control costs and maintain schedules. At the same time, as technology continues to evolve, the use of data analytics and AI enabled tools in infrastructure planning and delivery is expected to grow, supporting better decision-making and execution.”

Nickle says that while the adoption of AI is driving advancements in the delivery of construction services, it will not replace the skilled workforce anytime soon.

“Ongoing investment in workforce development remains essential and should be a priority for the industry as a strong construction sector is fundamental to economic growth,” he says. McCarthy is doubling down on initiatives to develop its craft workforce and expanding outreach through new partnerships with educational institutions and apprenticeship programs.