Data Centers Remain ‘Largest Driver Behind Growth’ in Construction Planning

Why It Matters

Data‑center construction is now the engine of growth for the broader non‑residential sector, signaling strong demand for digital infrastructure while highlighting persistent macro‑economic headwinds that could shape future investment decisions.

Key Takeaways

• Data centers powered a 6.2% month‑over‑month planning increase.
• Commercial planning jumped 37.2% YoY, largely due to data centers.
• Jacobs' data‑center business doubled, reflecting hyperscaler investment surge.
• Labor shortages and material cost spikes still dampen construction confidence.
• 44 projects over $100 million entered planning, a 14.1% YoY rise.

Pulse Analysis

The current data‑center construction boom is reshaping the non‑residential building landscape. Hyperscalers such as Google, Amazon and Microsoft are committing billions to purpose‑built facilities, fueling a pipeline that now accounts for the majority of the Dodge Momentum Index’s growth. Jacobs’ reported 100%+ increase in its data‑center division underscores how quickly engineering firms are reallocating resources to meet the demand for high‑density power, cooling and low‑latency connectivity. This trend not only boosts construction volumes but also drives ancillary markets, from specialized electrical contractors to advanced fire‑suppression systems.

Beyond the data‑center surge, other commercial segments are showing modest recovery. Office, warehouse, hotel and parking‑garage planning all posted double‑digit month‑over‑month gains, suggesting a gradual stabilization after a sluggish start to the year. However, retail remains an outlier, with planning activity losing momentum amid shifting consumer habits. The sector still grapples with labor shortages, rising material prices and lingering supply‑chain disruptions, factors that temper optimism and could constrain the pace of new starts if not addressed.

Looking ahead, the 14.1% year‑over‑year rise in the Momentum Index signals robust pipeline health, yet the sustainability of growth hinges on macro‑economic conditions. Investors should monitor labor market trends and input‑cost inflation, as they directly affect project margins. Regional dynamics also matter; the highlighted projects in West Virginia, Texas and Maine illustrate how data‑center siting is spreading beyond traditional tech hubs, potentially unlocking new economic development incentives. Stakeholders that can navigate these variables will be best positioned to capitalize on the continued expansion of digital infrastructure construction.