Data Center Boom Contributes to U.S. Construction Boom

Re-Published With Permission From Construction News and Review

By Barbara Horwitz-Bennett | Image Courtesy DPR Construction

U.S. construction has reached record-high levels, increasing approximately seven percent in 2024.

“The strongest spending growth has been in data center construction, which soared 56 percent year-to-date, and manufacturing plants, which jumped 22 percent,” said Ken Simonson, chief economist, Associated General Contractors of America.

And according to CBRE, driven by tremendous growth in AI, data center supply under construction increases in North America in the first half of 2024 was even higher, at 70 percent year-over-year.

While data centers comprise a small percentage of total U.S. construction last year, they did account for 8 percent of the total increase in construction spending over the past 12-month period.

“Data centers represent one of the most significant and transformative segments of the construction industry,” said Karim Farouki, project executive, DPR Construction in Washington, D.C.

What does this mean for the industry, and how are data center contractors tooling up to help meet AI data center’s tremendous power and cooling infrastructure needs?

CNR spoke with two leading contractors about AI data center’s special requirements plus the challenges and strategies for keeping up with demand.

CNR: Explain this fast growing market’s need to support AI and the type of infrastructure required to run these systems.
Scott Cannon, executive vice president, general manager, Skanska: AI systems require extraordinary computing power and data storage compared to traditional computing. As a result, the AI revolution has significantly impacted the data center construction market, highlighted by increased labor demand to construct these high-tech facilities.

Data center construction requires hundreds of electricians per project – which can take up to three years to construct. The electricians must be skilled at installing complex power distribution systems, advanced cooling infrastructure and miles of specialized cabling to support the unprecedented power needs of data centers. The facilities also need multiple redundant systems for reliability.

Farouki: Data center construction is impacting the availability of resources and creating supply chain pressure.

Data centers are creating bottlenecks in supply chains, like healthcare or life science construction, where hospitals or laboratories compete for the same resources, e.g., generators, chillers, etc. The sheer size and complexity of these projects strain the availability of skilled labor from both project management and craft perspectives.

CNR: More specifically, what kinds of power and cooling systems do data centers require?
Kurt Wallner, project executive, DPR Construction: AI workloads require interconnecting multiple servers to process queries quickly. This necessitate high-density server racks and advanced cooling systems to handle increased energy consumption and heat generation.

AI training involves billions of datasets, demanding specialized processors such as GPUs and TPUs to perform parallel computations efficiently.

AI consumes a lot of energy, so there’s a growing emphasis on sustainable practices, such as integrating renewable energy, using liquid cooling and adopting energy-efficient designs.

Farouki: To manage power and cooling, we are transitioning to advanced cooling techniques such as water directly cooling the chip. This enhances energy efficiency and reduces overheating risks. In addition, scalable systems accommodate technological advancements and evolving client requirements.

Innovations like DPR’s Mass Timber Hot Aisle containment solutions, use of non-fuel-powered equipment, and water-efficient designs are also becoming critical.

CNR: What are some of the most challenging aspects of building these centers, and how are you addressing these?
Cannon: As noted, building data centers presents two primary challenges: supply chain uncertainty and workforce shortages. While supply chains show signs of stabilization, market dynamics still require constant monitoring and management.  To address this, we closely with key vendors and suppliers to maintain reliable material flows and mitigate potential disruptions.

However, the workforce challenge is particularly acute. The Associated Builders and Contractors projects that the U.S. construction industry will need an additional 450,000 workers in 2025 to meet labor demands. To address these persistent labor shortages, we focus heavily on talent retention and development, ensuring we maintain the specialized workforce needed for these complex projects.

Farouki: Early engagement helps mitigate risks and streamline project execution. This includes assistance with site planning, budgeting and connecting developers with design partners. With design-build delivery, this enhances efficiency, aligns stakeholder goals and optimizes project value.

We utilize offsite construction methods to assemble components in controlled environments, enhancing quality control and expediting on-site assembly from electrical rooms to exterior skin.

We also leverage advanced BIM, VR and AI technologies, and we use digital twin technology to simulate real-world performance to optimize designs and operational efficiency.