Data center construction spending is at the center of a dramatic transformation in the construction industry, reshaping where capital flows and how contractors position themselves for future growth. This article explores the latest trends, drivers, and implications of data center construction spending, providing actionable insights for contractors, industry professionals, and regional stakeholders.
A data center is a facility that houses computer systems and associated components, such as telecommunications and storage systems. These facilities are critical for supporting the digital economy, powering everything from artificial intelligence (AI) to cloud computing and enterprise data storage.
For readers in construction, technology, and economic development—especially those in regions like the Carolinas—understanding the scale and impact of data center construction is essential. The sector’s explosive growth is influencing labor markets, material costs, and regional economies, even as broader nonresidential construction faces headwinds.
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Whether you are a contractor seeking new opportunities, a policymaker tracking economic shifts, or a regional stakeholder interested in infrastructure investment, this guide will help you navigate the fast-evolving landscape of data center construction.
The construction industry remains a cornerstone of the U.S. economy, shaping skylines and supporting millions of jobs across the country. In recent years, the sector has faced a series of ups and downs, with total construction spending fluctuating in response to shifting economic conditions.
According to the Census Bureau, overall construction spending in the United States declined by 1.4% in 2025 compared to the previous year. This reflects broader headwinds, including labor shortages, persistent material price inflation, and tariffs on essential inputs such as steel, aluminum, and copper.
Amid these challenges, data center construction spending has emerged as a critical growth engine within the industry. While many traditional segments have struggled, data center construction spending surged, growing by nearly 30% year over year in December 2025 alone.
This remarkable momentum is fueled by the relentless demand for artificial intelligence infrastructure and the need for secure, efficient data storage to power the digital economy. As AI applications proliferate and businesses seek ever-greater access to reliable data, the construction industry is responding with a wave of investment in advanced data center projects.
Despite ongoing pressures on labor and materials, the commitment of major technology companies to expanding their digital infrastructure has helped offset some of the sector’s most significant challenges. The result is a construction landscape where data center projects stand out as both a symbol of innovation and a vital source of stability for contractors navigating an uncertain market.
The construction economy in 2026 is being shaped by a paradox. On the one hand, data center construction spending continues to surge, driven by artificial intelligence, cloud expansion, and demand for hyperscale computing. On the other hand, the broader nonresidential market is softening—and data centers, despite their explosive growth, cannot carry the industry alone.
Recent data from early 2026 shows that total U.S. construction spending has weakened, with private nonresidential categories posting several consecutive months of decline. Yet within that same period last year, data center projects registered measurable monthly gains, standing out as one of the few bright spots in an otherwise flat-to-negative landscape.
A breakdown of data center construction spending by category and region reveals that these gains are concentrated in specific sectors and geographic areas.
The contrast is stark. Manufacturing plants are pulling back sharply as mega semiconductor and EV battery projects wind down. Office buildings remain subdued. Some commercial segments continue to struggle with hybrid work patterns and cautious corporate investment. Meanwhile, AI servers and hyperscale campuses (large-scale data centers designed for massive computing needs) continue to break ground, and analysts are breaking down data center spending by type and location to better understand growth drivers.
For readers in North and South Carolina, this trend matters directly. The Southeast is emerging as a key region for AI-ready data center campuses, with access to competitive power, available land, and robust fiber connectivity. Data center construction activity and costs can vary significantly by city—for example, markets like Atlanta, Dallas, and Phoenix are seeing different levels of investment and pricing compared to Charlotte or Raleigh. ABC Carolinas is tracking these developments closely, helping members understand where future work and workforce needs are moving.
As an example, the recent announcement of a $1 billion hyperscale data center campus in the Atlanta metro area highlights the scale of investment and the type of projects driving regional growth.
Data center construction spending is experiencing an unprecedented “infrastructure investment supercycle,” driven primarily by the need to support high-density AI workloads, with global capacity projected to nearly double by 2030.
Here are the latest key statistics:
| Statistic | Value/Description |
|---|---|
| 2025 U.S. Data Center Construction Spending | Expected to exceed $60 billion |
| 2025 Year-over-Year Growth | 32% increase, reaching $41 billion |
| December 2025 Growth | Nearly 30% year-over-year |
| Global Data Center Investment (Next 5 Years) | Projected to approach $3 trillion |
| Hyperscaler CapEx for 2026 | ~$700 billion announced by five major companies |
| Major Tech Company Annual Investment (2026) | Amazon, Microsoft, Google, Meta: trending toward $100 billion each |
| AI Workload Impact | Expected to drive server demand by 30% annually |
| Construction Cost CAGR (2020–2025) | 7%, with costs reaching $1,000 per sq. ft. by 2026 |
| Average Data Center Cost (2025) | $597 million; $960 per sq. ft. |
| Data Center Share of Office Construction | Now eclipsing all other office building spending |
| Power as Site Selection Driver | Access to electricity now outweighs land or construction costs |
| Labor & Material Challenges | Significant shortages and price increases due to tariffs and immigration policies |
| Regional Concentration | 80% of potential starts in five states (including North Carolina, Texas, Virginia) |
| Power Infrastructure Spending (2026) | Projected at $27.8 billion, up from $16.5 billion in 2025 |
| Four-Year CAGR (2021–2025) | 98% for data center sector |
| GDP Impact | Estimated 0.2% contribution to U.S. GDP growth in 2025 |
| YTD Spending (Nov 2025) | $53.7 billion, up 138.6% over 2024 |
| Key Takeaways: |
The broader U.S. construction climate at the start of 2026 is characterized by cooling demand, tighter financing, and elevated interest rates weighing on many private projects. This is not a recession, but it is a correction—and it is hitting private construction hard.
Private nonresidential construction has recorded multiple consecutive months of decline, with particular weakness in manufacturing spending. Several mega semiconductor and EV battery projects that launched earlier in the decade are now winding down, removing billions in seasonally adjusted annual rate outlays from the pipeline.
Other segments are not faring much better:
In dollar terms, these contractions exceed the gains from data centers. That is why overall nonresidential totals remain flat to negative, even as data center spending posts double-digit growth.
To understand the scale mismatch, consider this: annualized data center outlays are in the mid-tens of billions of dollars. The U.S. economy, by contrast, is measured in the multi-trillions. Data centers are growing fast, but they are not yet large enough to move the needle on their own.
Transition: Despite these challenges, one segment—data center construction—continues to show remarkable growth, as explored in the next section.
Despite the broader market weakness, data center construction spending has built remarkable momentum over the past five years—and longer.
The numbers tell the story clearly:
| Year | U.S. Data Center Construction Spending |
|---|---|
| 2014 | ~$1.8 billion |
| 2024 | $25–30 billion+ |
| Growth | ~2,657% (seasonally adjusted annual terms) |
| Government statistics from the Census Bureau, based on reports from builders, owners, and architects, often group data centers under the “office building construction” category, which includes both traditional offices and data centers. But industry analysis shows that detailed models have been developed to better track data center spending within this office category, revealing that data centers now represent the dominant share of new office category spending—shifting from just 5% of total office construction spending in 2014 to nearly 32% in recent years. |
This growth is not slowing. Recent months in early 2026 have shown data center-related categories among the largest gainers in all of nonresidential construction, even as overall nonresidential construction totals flatline or dip.
The momentum extends beyond the U.S. Global projections estimate that cumulative data center and digital infrastructure investment through the early 2030s will reach into the trillions of dollars. These investments are shaping the world, highlighting the international relevance and impact of data center construction. Morgan Stanley projects nearly $3 trillion in global revenue by 2029. McKinsey estimates that capital outlays will be close to $7 trillion by 2030.
This persistence despite macro headwinds—higher borrowing costs, geopolitical tensions, cost inflation—underscores the strategic nature of data center investment.
The current wave of data center projects began accelerating around 2023 and has intensified through 2026. The central catalysts are clear:
Major technology companies have announced multi-year capital expenditure plans that are staggering in scale:
| Company | Announced 2025 Capital Budget |
|---|---|
| Amazon | $100 billion |
| Alphabet | $75 billion |
| Meta | $65 billion |
| A significant portion of this money is directed toward data center infrastructure. Hyperscalers (large-scale cloud providers operating massive data centers) spent around $210 billion on AI-related data center capital expenditures in 2024 alone. As an example, Meta’s $800 million Temple, Texas data center project highlights the scale of investment and the complexity involved in modern data center construction. |
These facilities are not simple office buildings. They demand complex electrical and mechanical systems:
Average construction costs now reach $10 million per megawatt in the U.S., translating to $500 million to $2 billion for average-sized facilities. Some mega-projects exceed $20 billion. Typically, it takes about two years from the decision to build a data center until the facility becomes operational, reflecting the complexity and scale of these projects.
Markets with access to reliable power, available land, and favorable regulation—such as parts of North Carolina and South Carolina—are increasingly attractive locations for hyperscale and colocation (shared data center facilities leased to multiple tenants) campuses.
While data center spending is growing quickly, the benefits are concentrated among a relatively small group of large, specialized contractors and subcontractors. Construction contractors play a critical role in managing costs and setting project expectations for data center builds, ensuring that spending aligns with the unique requirements of these complex facilities.
Most data center projects are mega-campuses or multi-building phases measured in:
These projects are typically awarded to firms with extensive mission-critical and MEP (mechanical, electrical, and plumbing) track records. Entry barriers include:
A 2025 ABC survey found that only 1 in 8 member contractors reported having data center contracts. This illustrates the “fewer but bigger” pipeline: a handful of large campuses can drive regional statistics, but they do not automatically create a broad base of work for the entire construction ecosystem.
From ABC Carolinas’ perspective, this concentration underscores the importance of helping mid-sized and specialty members position themselves. Through workforce development and hands-on training programs, partnerships with general contractors like Turner Construction, and relevant certifications, firms can earn a seat at the table rather than watching these projects bypass local talent.
Transition: Even for those who do win work, significant constraints and frictions remain in the sector.
Even this high-growth sector is not immune to constraints. Projects face delays, increased bid risk, and limits on how quickly capacity can come online.
Cost pressures remain elevated:
Supply chain bottlenecks persist into 2026:
Skilled labor shortages are acute:
These shortages are particularly pronounced in fast-growing Sun Belt and Southeast markets. According to labor statistics, the gap between the number of available workers and the number of construction sites needing them continues to widen.
These frictions connect directly to ABC Carolinas’ core services. Safety training, apprenticeship programs, and workforce development initiatives aim to build a deeper bench of mission-critical construction talent in the region.
North and South Carolina are increasingly attractive for data center developers. The region offers a compelling combination of factors:
| Factor | Carolina Advantage |
|---|---|
| Power costs | Competitive rates relative to coastal metros |
| Renewable portfolios | Growing solar and wind capacity |
| Utility partnerships | Proactive engagement with developers |
| Fiber connectivity | Strong networks from Charlotte and Raleigh-Durham to Charleston and Greenville |
| Large tech and cloud providers are siting data centers in the Southeast to diversify away from heavily constrained markets like Northern Virginia while staying close to major population centers along the East Coast. Construction activity and costs can vary significantly between cities such as Charlotte, Raleigh-Durham, Charleston, and Greenville, making city-specific factors an important consideration in data center construction spending. |
The types of projects emerging in the Carolinas include:
These projects are intertwined with state and local policy—tax incentives, power planning, and zoning decisions—that ABC Carolinas tracks and engages on through its advocacy and regulatory affairs work.
Regional contractors who invest in safety, quality, ethics, and technical training—and who leverage the benefits of ABC Carolinas membership—can become preferred partners on these long-term campus builds. The total project timelines on hyperscale facilities often span multiple years, creating sustained workstreams rather than one-off opportunities.
The economic footprint of data center construction is both significant and growing. In December 2025, spending on data center construction reached an annual rate of $45 billion, underscoring the sector’s rapid expansion. While this figure represents a fraction of the hundreds of billions of dollars invested in AI capital expenditures each year, it still marks a substantial contribution to the construction industry and the broader economy.
According to Goldman Sachs, the ongoing boom in data center construction added an estimated 0.2% to U.S. GDP growth in 2025. In the context of a $30 trillion economy, this is a meaningful boost—especially at a time when other construction categories are contracting.
The impact extends beyond headline numbers:
However, it’s important to recognize that not all of this spending translates directly into domestic economic growth. Roughly two-thirds of data center spending is allocated to imported semiconductors and electronic components, which can dampen the net effect on U.S. GDP. Even so, the construction industry’s role in delivering these complex, high-value projects remains a vital part of the nation’s economic engine—driving innovation, supporting jobs, and laying the groundwork for the next wave of digital transformation.
Data center construction represents a structural shift in where capital is flowing within nonresidential construction, not a short-lived cycle.
For contractors considering this market, several actions can improve positioning:
Assess capability gaps:
Build strategic relationships:
Prioritize safety culture and ethics:
Diversify your portfolio:
Data center construction will likely remain a bright spot in an otherwise mixed nonresidential landscape through the late 2020s.
While data centers cannot fully offset declines in manufacturing or other interest-rate-sensitive sectors today, they do provide a stabilizing floor for regional contractors who can access this work. The global electricity demand from AI and cloud computing shows no signs of slowing, and infrastructure must be built to meet it. The impact of data center construction spending and AI-driven demand is being felt worldwide as countries race to upgrade their digital infrastructure.
Emerging trends will shape the next generation of projects:
These shifts will create additional niches for specialized contractors who invest in the right capabilities.
Data centers are becoming a long-term pillar of the built environment, underpinning AI, cloud services, and the digital economy. Organizations like ABC Carolinas will continue to help members navigate this realignment—through advocacy, workforce development, customized insurance and benefits solutions for construction firms, and by connecting builders with the training and relationships they need to compete.
For industry leaders in the Carolinas, the path forward requires proactive adaptation. Business strategies, workforce pipelines, and partnerships must align with the ongoing shift toward digital infrastructure construction. The money is moving. The question is whether your firm is positioned to move with it.
While data center spending has grown to tens of billions of dollars annually in the U.S., it remains smaller than broad categories like total manufacturing or transportation construction. In the same period that data centers have posted double-digit gains, manufacturing construction has pulled back by billions of dollars in value as mega projects wind down. This scale mismatch is why data center strength cannot, by itself, lift overall nonresidential totals. The category represents significant growth but still accounts for a fraction of the multi-trillion-dollar construction industry.
Direct prime roles on hyperscale campuses are often limited to large firms with established mission-critical track records. However, significant opportunities exist for specialty trades, site work, concrete, interior fit-out, and ongoing maintenance contracts. Firms that invest in safety credentials, relevant training, and relationships with associated general contractors and developers can access subcontract work on these projects. ABC Carolinas members have found success by building expertise in specific trades needed on data center construction sites.
High-value capabilities for data center projects include:
These competencies distinguish contractors who can compete for mission-critical work from those limited to less demanding commercial projects.
Access to reliable, affordable power is becoming a gating factor for data center development. Total power demand from AI workloads is straining grids in established markets. Projects are increasingly coordinated with utilities, including on-site generation or renewables, and must navigate grid capacity limitations. This may slow some development in constrained areas while redirecting investment to power-rich regions such as the Southeast. Contractors in areas with strong utility partnerships and available capacity stand to benefit from this shift.
ABC Carolinas supports members pursuing careers in data centers through several channels. The association’s leadership and organizational structure provide advocacy on regulatory and power-related issues affecting the industry, offer safety and workforce training tailored to complex projects, facilitate networking with owners and large general contractors, and deliver educational programs that help members build competencies needed for mission-critical construction. This comprehensive approach helps regional firms compete for work that might otherwise go to out-of-state contractors.
