ColonialWebb, a Henrico County-based mechanical, electrical, and plumbing services provider, recently announced a significant expansion, adding approximately 600 employees in 2024. This growth reflects a broader trend in Virginia, where the data center sector is becoming a cornerstone of the local economy, generating substantial ripple effects that extend far beyond the immediate services they provide.
Data centers are not merely large structures packed with servers; they form part of a vital digital infrastructure ecosystem that includes fiber networks, internet exchange points, and energy systems. This interconnected infrastructure supports a range of sectors, including cloud computing, healthcare, online education, financial services, and logistics, ultimately facilitating everyday digital interactions such as emails and video calls.
The employment impact of this burgeoning sector in Virginia is profound. Data centers are estimated to contribute about 74,000 jobs, generating approximately $5.5 billion in labor income and $9.1 billion in annual GDP, according to a recent report by the Joint Legislative Audit and Review Commission (JLARC). The demand for personnel extends beyond operators to include engineers, electricians, and manufacturers, creating a wide array of jobs that spans various sectors. For instance, Acoustical Sheetmetal Company has seen its workforce grow to over 650 since 2019 and is investing $50 million in expansion efforts that will create an additional 350 jobs.
The economic impact is further illustrated by Weidmuller USA, which expanded its Chesterfield County facility by 24,000 square feet to cater to growing demand from data centers. This expansion allows the company to enhance local production and reduce lead times for North American clients.
Beyond employment, data centers provide substantial contributions to local and state tax revenues, primarily through real estate and business equipment taxes. In Loudoun County, data center-generated taxes accounted for a staggering $733 million in 2023, representing 31% of total county tax revenue. Such revenues enable local governments to fund community priorities, including infrastructure and affordable housing initiatives, without overstressing public services as seen with other types of development.
In light of their positive economic impact, many data center operators engage in community philanthropy and support local initiatives. For example, Meta, which has a large data center in Henrico County, has donated over $4 million to community organizations, schools, and educational programs, underscoring their commitment to giving back.
The robust digital infrastructure also enhances Virginia’s ability to attract and retain talent and investment. Despite facing challenges in population and GDP growth compared to other Southeastern states, the state’s expanding digital capabilities serve as a competitive advantage, linking economic assets such as ports, universities, and business centers, while also providing crucial global connectivity.
The significant capital investment driven by data centers is evident, as they accounted for 84% of all capital tracked by the Virginia Economic Development Partnership between 2022 and 2024. This influx of high-quality digital infrastructure has attracted both domestic and international investments, further bolstering regional economic growth.
Moreover, data centers serve as an essential backbone for high-growth sectors such as advanced manufacturing, cybersecurity, and aerospace technologies. Their existence fosters an environment ripe for innovation, providing businesses with the computing power and connectivity needed to develop new products and services.
As the economy continues to evolve, specifically with the rise of artificial intelligence and edge computing, the relevance of data centers in facilitating these shifts cannot be overstated. Their infrastructure will play a pivotal role in attracting high-value investments and talent in the years to come.
To ensure the continued benefits from data centers, strategic measures are necessary, including preserving local decision-making authority and extending tax incentives for data center equipment. The I-64 Innovation Corridor, a coalition focused on enhancing Virginia’s digital infrastructure, is advocating for these essential policy considerations to maximize the potential of the data center industry.
In summary, the narrative surrounding data centers should encompass their broader economic and community implications, demonstrating their role as catalysts for job creation, revenue generation, and long-term competitiveness, rather than merely focusing on cost concerns. By facilitating a wave of economic activity and innovation, these data centers are poised to contribute significantly to Virginia’s digital economy for years to come.
For more insights, visit the landing page to watch videos featuring ColonialWebb’s Nathan Wethington, Acoustical Sheetmetal’s Margaret Shaia, and Weidmuller USA’s Randy Sadler discussing their roles in the evolving landscape shaped by data centers.
