Data Centers Offset Weak Outlook for Commercial Construction in US
- brg_news_room
- 5 days ago
- 1 min read
US: Commercial real estate construction is expected to record little or no growth this year, as higher interest rates, elevated material costs, and labor shortages weigh on new project activity. According to estimates from FMI Corp, spending on offices, hotels, apartments, and warehouses is projected to decline in 2026. In contrast, data centers remain a key exception, supported by continued investment from major technology companies to meet rising demand linked to artificial intelligence. Construction spending on data centers is forecast to rise 23% in 2026, increasing their share of total nonresidential construction to over 6%, compared with 2% in 2023.
Industry executives noted that data center projects, which can exceed US$ 1 billion in construction value, are less sensitive to higher costs due to strong demand from hyperscalers such as Amazon, Google, and Oracle. However, labour constraints remain a risk, particularly as immigration enforcement actions reduce available workforce capacity. A survey by the Associated General Contractors of America found that a third of construction firms reported operational impacts from immigration enforcement in the past six months. Overall nonresidential construction spending is projected to reach US$ 844.4 billion this year, up marginally from 2025, though the increase would represent a decline in real terms after accounting for inflation.
Source: Reuters