Data center construction has emerged as the fastest-growing segment of US construction at a time when much of the nonresidential market is losing momentum. While office, hotel, warehouse and even manufacturing projects slow under the pressure of high interest rates, rising costs and cautious investment, data centers continue to attract capital, contractors and skilled labor at scale.
What began as a specialised corner of digital infrastructure is now supporting large parts of America’s construction economy. New forecasts suggest spending on data center construction is set to grow sharply in 2026, even as overall nonresidential construction barely holds flat once inflation is accounted for. When one sector expands while nearly every other contracts, it inevitably reshapes how resources, risk and attention are distributed across the industry.
The question for contractors is no longer whether data centers matter; but how prepared they are for the complexity that now comes with them.
Data Centers: The Fastest-Growing Segment in US Construction
Across the broader construction landscape, growth has slowed to a crawl. Office development remains subdued, manufacturing momentum has softened and many commercial projects are being deferred as financing costs remain elevated. Against this backdrop, US data center construction stands out as a clear exception.
When one asset class begins carrying nonresidential construction growth, it influences everything from labor availability to supply chains and delivery expectations. Data centers are no longer peripheral projects; they are now central to nonresidential construction trends in the US.
If data centers represented only a small fraction of construction spend a few years ago, what does it mean that their share has more than doubled so quickly? And how sustainable is that concentration for contractors managing diversified portfolios?
Why Data Center Construction Is Accelerating While Other Sectors Slow
The growth in data center construction is unfolding against tightening credit conditions, delayed groundbreakings and investor caution across most commercial real estate categories.
AI, Hyperscale Demand and Structural Growth
AI workloads and cloud expansion have created a structural demand for computing capacity that is largely insulated from short-term economic cycles. Hyperscalers such as Amazon, Google and Oracle continue to bankroll large-scale projects, even as inflation, tariffs and financing pressures weigh on other developments.
These hyperscale data center projects are fundamentally different from traditional commercial builds. They are larger, more technically complex and significantly more capital-intensive. Some now exceed a billion dollars in construction value, employing thousands of workers at peak delivery.
When a single project can rival the scale of entire commercial developments from other sectors, how does that change expectations around cost control, delivery certainty and risk tolerance?
Portfolio Concentration and Emerging Exposure
For contractors, this acceleration brings both opportunity and exposure. As data centers take up a growing share of pipelines, portfolio concentration risk becomes harder to ignore.
Growth may look strong on paper, but dependency on a single asset class can amplify exposure when delivery conditions change.
Power Infrastructure Is Now a Defining Constraint
One of the most significant challenges shaping data center construction today is power availability.
Why Power Requirements Are Fundamentally Different
Facilities designed for AI-driven workloads require enormous electrical infrastructure. On-site substations, redundant transmission connections, backup generators and complex power distribution systems are now standard requirements rather than exceptions.
This scale of demand has pushed power infrastructure for data centers from a background utility concern into the critical path of project delivery.
If data centers are now responsible for more than half of projected electricity demand growth in the US, how realistic are existing grid expansion timelines; and what happens when power availability dictates where projects can proceed?
Grid Constraints, Interconnections and Delivery Impact
Across multiple states, interconnection delays and utility capacity limits are influencing not just schedules, but site selection itself. New transmission lines face growing community resistance, adding further uncertainty.
Power is no longer an external dependency managed late in delivery. It is now a core variable shaping cost, schedule and project certainty.
Community Resistance Is Changing Project Certainty
Alongside power constraints, community pushback is reshaping the risk profile of US data center construction.
Land Use, Water, Energy and Environmental Concerns
Concerns around land use, water consumption, environmental impact and energy demand increasingly translate into permit delays, zoning challenges and political scrutiny.
In some regions, communities that welcome manufacturing facilities are resisting data center developments with equal intensity.
When External Stakeholders Shape Delivery Outcomes
These external forces now influence delivery certainty as much as execution performance itself. Data center construction challenges are no longer purely technical; they are regulatory, social and often unpredictable.
The Labor Shortage Behind the AI Boom
While the AI narrative often focuses on software and chips, the physical reality of AI data center construction depends on skilled trades; and those trades are in short supply.
Electricians, HVAC specialists and plumbing contractors are being pulled aggressively toward data center builds, intensifying labor shortages in data center construction across multiple states. Wage escalation, overtime and subcontractor premiums are becoming structural rather than temporary pressures.
As labor availability tightens, cost forecasts become more volatile. Contractors face growing difficulty maintaining accurate projections for delivery at scale, particularly on projects with compressed schedules and high technical demands.
Suggested Read: Construction Labour Crisis: A National Security Issue
Rising Costs, Tariffs and Delivery Pressure
The financial profile of data center construction costs is being shaped by more than labor alone. Tariffs on metals and imported materials, combined with long-lead mechanical and electrical components, are adding another layer of pressure to already complex builds.
Compressed delivery timelines amplify these risks. When procurement decisions, cost visibility and execution fall out of alignment, even well-funded projects can experience rapid margin erosion.
At enterprise scale, the challenge is not simply higher costs; it is maintaining control as complexity increases.
Why Data Center Construction Is a Stress Test for Contractors
Few project types combine as many risk variables as modern data centers. Power constraints, labor scarcity, regulatory friction, capital intensity and accelerated delivery schedules converge in a way that exposes weaknesses in traditional project controls.
For contractors, data center construction has become a stress test of maturity. Fragmented systems, delayed reporting and reactive decision-making struggle to keep pace with the demands of these projects.
Success increasingly depends on visibility, coordination and the ability to manage delivery at scale; not just on technical execution.
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What the Data Center Boom Means for US Contractors in 2026 – And How to Respond
The data center boom shows no immediate signs of slowing, but it is becoming increasingly unforgiving. As data centers continue to dominate nonresidential construction trends in the US, contractors are facing growing pressure to deliver certainty alongside speed, often under conditions shaped by power constraints, labor volatility, regulatory friction and rising project values.
Those that adapt by strengthening cost control, improving delivery alignment and managing complexity proactively will be far better positioned to scale sustainably. Those that continue to treat data centers like conventional commercial builds may find that growth comes with unexpected exposure, particularly when small disruptions translate into large financial consequences on billion-dollar projects.
At the heart of this shift is a simple reality: data centers demand a different level of operational maturity.
To navigate this new environment, several strategic changes are becoming critical.
Move From Retrospective Reporting to Real-Time Visibility
Monthly cost reports and delayed progress updates are too slow for projects where conditions can shift within days. Contractors should prioritise real-time insight into cost movement, delivery risk and scope changes so issues surface early while corrective action is still possible.
Integrate Commercial, Financial and Project Operations
Fragmented workflows between procurement, finance and site teams create blind spots in complex builds. Aligning commitments, forecasts and execution enables better control over cost exposure, schedule risk and delivery outcomes.
Treat Power and Regulatory Risk as Core Project Variables
Power availability, grid approvals and permitting should be embedded directly into project planning and controls, rather than managed as external dependencies. These factors increasingly dictate timelines, cost certainty and site viability.
Strengthen Forecasting for Labor Volatility
With skilled trades in short supply, workforce availability has become one of the most unpredictable drivers of cost and delay. Enhanced labor forecasting tied to live project data is now essential for maintaining financial control.
Manage Portfolio Concentration Proactively
As data centers take up a larger share of nonresidential pipelines, leadership teams must monitor sector exposure across regions, clients and project sizes to maintain resilience as market conditions evolve.
Build Delivery Models for Scale, Not Just Speed
The organisations that succeed in this cycle will not simply be the fastest builders. They will be those with delivery models designed for complexity; where visibility, coordination and financial control scale alongside project size.
These strategic shifts increasingly rely on connected construction management platforms that bring financial, commercial and operational control into a single delivery environment; enabling contractors to manage complexity proactively rather than reactively.
Why Construction Management Platforms Matter More in This Cycle
The data center boom is not just changing what contractors build; it is changing how construction must be managed.
As projects grow larger and more complex, the cost of delayed insight increases. Decisions made weeks too late; on procurement, labor or scope changes can cascade into schedule slippage and financial exposure that is difficult to recover.
This is where construction management platforms move from being operational conveniences to strategic necessities.
From Reporting to Real-Time Control
Enterprise contractors delivering hyperscale data center projects require real-time alignment between:
- Site progress and financial performance
- Procurement commitments and cost forecasts
- Workforce deployment and delivery schedules
Platforms that integrate these functions enable teams to see issues as they emerge, not after outcomes are already set.
When regulatory delays affect schedules, or labor availability shifts mid-project, how quickly can leadership see the impact and act on it?
How Xpedeon Helps Contractors Manage Data Center Construction Risk
The pressures reshaping data center construction are not theoretical, they are already materialising on projects across the US. Supply chain disruption, rising costs, delivery delays, and power uncertainty are converging on some of the most capital-intensive builds in the market.
Xpedeon addresses these challenges by embedding financial, commercial and operational control directly into project execution, helping contractors move from reactive reporting to proactive decision-making.
Supply Chain Shortages and Volatility
Data center projects depend on long-lead equipment, specialist materials, and tightly sequenced procurement. Disruptions in skilled labor and material availability can quickly derail schedules and budgets.
Xpedeon enables contractors to manage supply chain exposure through:
- A real-time RFQ and procurement workflow
- Inventory visibility across projects and locations
- Early identification of gaps between demand, availability and delivery
According to the 2026 AlixPartners Data Center Outlook, 11% of industry leaders cite skilled labor and material shortages as a primary barrier to project delivery.
Suggested Read: How Can Contractors Turn Their Supply Chain into a Value Chain?
Cost Overruns in High-Value Builds
With individual hyperscale data center projects now exceeding billions in value, even small percentage overruns can translate into substantial financial exposure. Inflation, labor premiums, and material volatility continue to push final costs beyond original estimates.
Xpedeon supports tighter cost control through:
- Live job costing aligned with project execution
- Automated variation and change management
- Early visibility into cost-to-complete as conditions change
Industry analysis indicates that commercial construction projects can experience cost inflation of 5–10%, equating to $20 billion or more on large-scale developments when controls lag execution.
Suggested Read: How Does Job Costing Help Prevent and Predict Cost Overruns?
Timeline Delays and Regulatory Friction
Compressed schedules and regulatory hurdles are increasingly common in US data center construction, particularly as permitting, community opposition, and power approvals influence delivery timelines.
Xpedeon reduces delivery friction by:
- Connecting site teams and head office through a mobile-first project environment
- Ensuring real-time alignment between progress, cost, and approvals
- Supporting faster issue resolution between field and finance teams
Research highlights that 23% of data center developers identify regulatory hurdles as a major constraint, directly contributing to project delays.
Power Forecasting and Workforce Alignment
Power availability and labor planning are now inseparable challenges. Data centers are driving a disproportionate share of new electricity demand, while workforce constraints complicate delivery forecasting.
Xpedeon integrates:
- Budget forecasting with HR and payroll data
- Workforce cost visibility aligned to delivery schedules
- Financial planning that reflects power-driven design and execution demands
National load growth forecasts indicate that data centers account for approximately 55% of projected electricity demand growth, underscoring the importance of accurate power and workforce planning.
From Boom to Sustainable Growth
The data center boom presents immense opportunity but also heightened exposure. Growth without control quickly becomes risk when power, labor, regulation and cost pressures intersect.
The contractors that succeed will be those that combine execution capability with real-time visibility and integrated control.
As data centers become central to America’s construction economy, the real question is no longer whether contractors can build them; but whether their construction management platforms are built for what these projects now demand.
Ready to take control of complex construction delivery?
Get started with Xpedeon today to see how unified construction management can support your data center projects at scale.