Demand for critical infrastructure is driving construction in the mountain states and the Southwest, with several large projects landing on ENR’s list of best starts for 2025. The list shows 10 of the largest projects to begin construction in the eight-state region of Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming.
The list is based on data from Dodge Data & Analytics along with input from project teams and other sources. See the main start chart for project details.
Population growth drives the market
Sindhu Avalokita, senior vice president of sales at Jacobs, says, “Infrastructure sectors, particularly water, transportation and energy, have provided the most consistent opportunities in the Mountain States and Southwest, largely due to above-national 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, transportation, reuse and system reliability,” he adds. “Because water systems are essential to communities, we’re seeing these projects move forward even as other developments slow.”
Jacobs is the design and construction firm for the $267 million San Juan Lateral Water Treatment Plant in Sheep Springs, NM for the US Bureau of Reclamation. Construction began in the spring of 2025 and is expected to be completed in 2028. Jacobs will handle O&M for 12-24 months after construction, then turn the plant over to the Navajo Nation and Navajo Tribal Utility Authority in 2030, says George Sbily, Jacobs’ senior director of public relations.
Jacobs is building the $267 million San Juan Lateral Water Treatment Plant in New Mexico.
Aerial images courtesy of Archer Western
“Projects like this show how technical rigor and trusted partnerships come together to solve complex water challenges at scale,” says Span Tummuri, director of water market growth at Jacobs. “Working together with the Bureau of Reclamation, tribal leaders and our delivery partners, we are strengthening water resilience for the region and building a system that will reliably serve communities for generations.”
“Industrial facilities linked to water systems, energy supply, advanced manufacturing and other critical functions continue to advance 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, constraints on state and local funding, and uncertainty about 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 are seeing does not necessarily reflect a lack of demand, but rather a strategic recalibration by landlords who are focusing capital on infrastructure investments that are essential, financeable and resilient in any economic cycle. Funding and attention are shifting to economic, water and mission resilience systems that directly support water, transportation and basic resilience. These projects provide a clear public benefit and alignment with federal and state funding programs rather than large speculative expansions,” he says.
Avalokita adds: “We expect investment to remain focused on water, transportation, energy and other critical infrastructure, driven by continued population growth, regional water scarcity, extreme weather and the sheer scale of the region. Landowners 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 of TSMC
Topping this year’s Top Starts list 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 into a $165 billion megacampus.
TSMC is the largest foreign direct investment ever made in the United States, and Fab 3 will make the world’s most advanced microchip, the 2-nanometer chip, according to the manufacturer. These chips provide a 10% to 150% increase in computing speed and use less power, 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, the company said.
Support infrastructure
In Salome, Arizona, McCarthy is building the next two phases of the $398 million 500 MW Centennial Flats project, which includes a battery energy storage system. McCarthy started Phase 1 in 2024. The current phases began in February 2025, with completion scheduled for July this year.
“As solar energy and storage facilities are being built quickly and efficiently, many entities are recognizing the benefit of adopting these forms of energy generation as effective solutions to increase energy production for their communities and utilities,” says Chris Nickle, Southwest Region President of McCarthy Building Cos.
“Water, transportation and energy have provided the most consistent opportunities … due to population growth above the national average, climate conditions and ongoing public investment.”
—Sindhu Avalokita, Senior Vice President, Jacobs
“We are seeing the greatest emphasis and growth in critical infrastructure areas such as energy, water and aviation,” says Nickle. “Water in the West is also a major area of concern due to ongoing drought conditions, which threaten surface water sources. Many water providers in the region are looking to water reuse solutions and advanced water purification technologies to ensure they can continue to provide clean water to current and future businesses and residents.”
“Given funding constraints, we can expect to see a greater emphasis on cost certainty, constructability and risk management,” says Avalokita. “As delivery partners, we are 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 advances in the delivery of construction services, it won’t replace skilled labor anytime soon.
“Continued investment in workforce development remains essential and should be a priority for the industry, as a strong construction sector is critical to economic growth,” he says. McCarthy is doubling down on initiatives to develop its craft workforce and expanding its outreach through new partnerships with educational institutions and apprenticeship programs.
