Prepared for Pennsylvania’s Construction Leaders
Executive Summary
This week’s Pennsylvania construction market was defined by three major themes: data-center regulation, industrial investment and a construction market that is increasingly divided between high-growth and slower segments.
The most consequential development remains Gov. Josh Shapiro’s new data-center rules. The administration says more than 100 data-center proposals have been reported in Pennsylvania, but only five currently have all permits needed for their first phase. The new rules remove data centers from the state’s Fast Track permitting process and require local approval and legally binding commitments on energy, environmental protection, workforce and community engagement.
At the same time, new industrial and commercial developments continue to move forward. A $2.1 million manufacturing expansion in Hanover, a $500 million-plus Northeast Philadelphia marina/mixed-use project, and the opening of a 450,000-square-foot adaptive-reuse commercial development in Washington County were among this week’s notable developments.
The broader market is sending a more complicated signal: Pennsylvania construction employment was essentially flat in July and down 0.8% year over year, while national contractor backlog has fallen to its lowest level since January. Data-center contractors, however, continue to report substantially stronger backlogs than contractors without data-center work.
1. Data Centers: Pennsylvania’s New Rules Are Starting to Reshape the Market
Gov. Josh Shapiro’s August 18 executive order continues to dominate Pennsylvania construction policy discussions as reported in last week’s Commercial Construction (please review for specific changes to data-center permitting). This week, new reporting examined how the rules will actually affect construction and whether the state’s approach could slow or eliminate speculative projects. Pennsylvania Governor — Data Center Executive Order
Why it matters to KCA contractors
This could be a major change to Pennsylvania’s largest emerging private construction market. The new framework potentially means:
- More preconstruction work: Developers will need to solve power, permitting, workforce and community issues earlier.
- Fewer speculative projects: Some proposals may never reach construction.
- Longer schedules: Local and state approvals could become a greater source of schedule risk.
- More infrastructure work: Developers responsible for power and related infrastructure could generate additional electrical, utility, civil and energy construction.
- Potential advantage for established contractors: Contractors with strong workforce, safety and apprenticeship capabilities may be better positioned for projects that survive the new approval process.
Due to public opposition to data centers, the construction industry should pay close attention to the community-benefit component of future projects. Data centers that demonstrate the following will likely have an easier path than projects viewed as speculative or primarily benefiting an outside developer:
- Pennsylvania jobs
- Apprenticeship opportunities
- Local subcontracting
- Tax revenue
- Infrastructure investment
- Responsible energy planning
2. $2.1 Million Hanover Manufacturing Expansion
Gerard Daniel Worldwide will invest $2.1 million to expand its manufacturing operation in Hanover.
The project includes:
- Building infrastructure upgrades
- A new electrical transformer
- New manufacturing equipment
The Commonwealth is providing $200,000 toward the project.
The expansion is expected to create 35 new jobs while retaining 107 existing positions. Pennsylvania says it competed with Texas to secure the investment.
Pennsylvania DCED — Gerard Daniel Expansion
Why it matters
This is an excellent example of the type of mid-sized industrial construction that can provide opportunities across Pennsylvania without the enormous scale and regulatory uncertainty surrounding data centers.
For contractors, projects like this generate work in:
- Electrical
- Site work
- Building renovations
- Manufacturing infrastructure
- Equipment installation
- Mechanical systems
3. $80 Million Northeast Philadelphia Marina/Mixed-Use Project
Developers of One River Marina in Northeast Philadelphia are seeking financing for a project that has grown to nearly $80 million.
The proposed development includes:
- A full-service marina
- Four restaurants
- An event space
- Yacht club facilities
The owners are pursuing Opportunity Zone designation to help attract private investment.
Philadelphia Business Journal — One River Marina Project
Why it matters
This is a useful counterpoint to the data-center-heavy narrative.
Pennsylvania’s commercial construction pipeline also includes hospitality, entertainment, waterfront redevelopment and mixed-use projects, particularly in Philadelphia.
It also demonstrates the continued importance of financing conditions. The project needs additional capital before it can translate into a major construction opportunity.
4. Former Washington Crown Center Reborn as 450,000-Square-Foot Commercial Campus
Industrial Realty Group and PREP Funds announced the opening of the 100,000-square-foot retail phase of Franklin Crossroads Park in North Franklin Township.
The project represents an extensive 450,000-square-foot adaptive-reuse redevelopment of the former Washington Crown Center shopping mall.
The retail component is reportedly 98% leased, while other commercial opportunities remain available.
Industrial Realty Group — Franklin Crossroads Park redevelopment
Why it matters
Adaptive reuse is becoming an increasingly important commercial construction category.
Instead of building entirely new structures, developers are:
- Repositioning dead malls
- Reusing industrial properties
- Converting obsolete commercial buildings
- Creating mixed-use campuses
That creates opportunities for contractors in demolition, structural modifications, MEP upgrades, interiors, site work and tenant improvements.
5. York Suburban High School Project Represents $62.8 Million Construction Opportunity
A newly updated project listing for York Suburban High School additions and renovations shows estimated construction costs of approximately $62.8 million:
| Trade | Estimated Cost |
| General Construction | $34.2M |
| HVAC | $12.4M |
| Electrical | $10.4M |
| Plumbing | $5.8M |
| Total | $62.8M |
The project includes demolition, site work, additions and renovations. As of the August 25 update, the project had not yet been awarded.
ConstructConnect — York Suburban High School Project
Why it matters
This is exactly the type of institutional project KCA members should be tracking.
The project illustrates the continued pipeline for:
- General contractors
- HVAC contractors
- Electrical contractors
- Plumbers
- Site contractors
- Specialty trades
It also demonstrates that education construction remains a meaningful source of work even while some private commercial segments are slowing.
6. Penn State Capital Projects Continue to Move Through Procurement
Penn State University continues to maintain a substantial construction pipeline.
Current projects include:
- Thompson Hall improvements
- Hammond Building demolition and site restoration
- Capital Systems Renewal Program electrical construction
- Steam Lines/O Street Pipe Repairs at Penn State Harrisburg
- Deike Building steel piping replacement
- Altoona projects
Penn State’s official project database shows multiple projects in bidding, prequalification or award stages.
The Harrisburg steam-line project involved underground hot-water piping replacement and chilled-water expansion, with a bid package valued as a capital project and a bid deadline of August 25.
Penn State — Trade/Bid Packages
Why it matters
Higher education provides a recurring, diversified construction pipeline that includes both large capital projects and smaller renovation/mechanical packages.
7. Near-Term Public Bid Opportunities
Several projects are either closing bids now or entering the procurement pipeline.
Pittsburgh — Sheraden Park Phase 1
The City of Pittsburgh is seeking a general contractor for Phase 1 construction at Sheraden Park.
Scope includes:
- Excavation
- Grading
- Sanitary sewer
- Concrete
- Asphalt paving
- Fencing
The bid deadline is August 28.
Dunmore Carpet Factory Renovation
A major renovation and site-work solicitation for the former Dunmore Carpet Factory has a mandatory pre-bid meeting August 28 and bids due September 22.
The project is subject to Pennsylvania prevailing-wage requirements.
Pittsburgh VA — HVAC/RO Upgrade
The Department of Veterans Affairs has a solicitation for AHU and reverse-osmosis system upgrades at a Pittsburgh facility, with a response deadline of August 27.
Why it matters
The public market continues to offer a steady stream of work across Pennsylvania, particularly in:
- Education
- Healthcare
- Municipal facilities
- HVAC/mechanical
- Parks and recreation
- Infrastructure
8. Pennsylvania’s Construction Employment Picture Is Mixed
The latest BLS data show Pennsylvania had approximately 261,400 construction jobs in July, down slightly from June and 0.8% below July 2025.
At the same time, the state’s overall unemployment rate fell to 3.9%, the first time it has been below 4% since October 2024.
Why it matters
A 3.9% overall unemployment rate means contractors are competing for workers in a tight labor market even though construction employment itself isn’t growing.
This reinforces the importance of:
- Apprenticeships
- Recruitment
- Retention
- Career and technical education
- Pre-apprenticeship
- Workforce partnerships
9. OSHA Silica Enforcement Highlights Continuing Safety Risk
OSHA cited General Shale Brick at its Watsontown plant for alleged respirable-silica violations.
OSHA proposed penalties totaling $496,528, citing three willful, four serious, one repeat and one other-than-serious violation.
Why it matters to construction
Although this is a manufacturing facility rather than a construction site, silica exposure is a major issue for construction contractors performing:
- Concrete cutting
- Saw cutting
- Masonry
- Grinding
- Demolition
- Drilling
The enforcement action is a useful reminder that OSHA continues to focus heavily on respirable silica exposure and the adequacy of engineering controls, respiratory protection and medical surveillance.
10. $80 Million+ Rail Investment Continues Supporting Pennsylvania Construction
The Commonwealth announced this week that expanded Pennsylvanian passenger rail service between Pittsburgh, Harrisburg, Philadelphia and New York will begin in November.
The project is supported by more than $80 million in Commonwealth investment, with construction already underway or completed.
Pennsylvania previously secured $143 million in federal passenger-rail funding for infrastructure and safety improvements along the Pittsburgh Line.
Pennsylvania Governor — Expanded Pennsylvanian Service
Why it matters
Rail investment has implications beyond passenger service.
Improved rail infrastructure supports:
- Industrial development
- Manufacturing
- Logistics
- Freight movement
- Site selection
For contractors, it also represents another source of infrastructure work competing for heavy-civil and specialty-trade capacity.
KCA’s 5 Things to Watch Next
1. Data Center Projects That Survive the New Rules
The key question is no longer how many data centers have been proposed.
It is:
Which projects have the power, financing, local approvals and community support to actually build?
Watch for project cancellations, redesigns, local zoning actions and new power agreements.
2. The First Major Project to Move Through Pennsylvania’s New GRID Process
The first major data-center project to navigate the new rules will provide an important precedent for developers, utilities and contractors.
It could establish how much additional time and documentation the new process adds.
3. Industrial Development Beyond Data Centers
The Gerard Daniel expansion and the broader manufacturing pipeline suggest that advanced manufacturing deserves more attention from KCA contractors.
Watch for additional projects in:
- Pharmaceuticals
- Life sciences
- Advanced materials
- Energy equipment
- Robotics
- Semiconductor-related manufacturing
4. Education & Healthcare Capital Spending
The York Suburban project and Penn State’s continuing procurement pipeline demonstrate that institutional construction remains active.
KCA should continue tracking:
- School construction
- University capital plans
- Hospital expansions
- Medical facilities
- CTE facilities
These projects could provide important diversification for contractors whose private-sector backlog is softening.
5. Contractor Backlog Heading Into 2027
The decline to 8.0 months of national backlog deserves continued attention.
KCA should watch whether Pennsylvania contractors begin reporting:
- Slower bidding
- Increased competition
- Margin pressure
- Delayed private projects
- More aggressive pursuit of public work
The data-center versus non-data-center backlog gap is particularly important for understanding which contractors are positioned well for 2027.
Bottom Line
Pennsylvania’s construction market remains active—but it is becoming increasingly selective.
The data-center boom continues to generate enormous potential, but Pennsylvania’s new regulatory framework means power, permitting, community support and workforce commitments are now part of the construction equation.
At the same time, advanced manufacturing, healthcare, higher education, public construction and adaptive reuse are providing important alternatives.
For constructioncompanies, the message heading into the fall is straightforward:
Don’t just watch where the money is being announced. Watch which projects can actually get permitted, financed, staffed and built.
That distinction will become increasingly important as Pennsylvania’s commercial construction market heads toward 2027.
Building Pennsylvania 