As the rise of artificial intelligence accelerates infrastructure and energy needs, data centers continue to gain ground in construction spending.
Spending on data center construction in October was 18.4 percent higher compared to the same time last year, and the highest year-over-year growth among the major non-residential asset classes, according to a TRD Data analysis of the most recent data available from the U.S. Census Bureau.
The growth of spending on data centers stands in contrast to the rest of the market. Overall, private construction spending for both residential and commercial properties fell 1.9 percent year over year, with the dollars spent on CRE falling at an even greater rate, more than 2.6 percent.
But the allocation of more dollars toward data centers underscores the demand for such facilities, expected to support the rapid growth of artificial intelligence.
Total spending on data centers in October clocked in at more than $42 million, the sixth-highest total among the sectors analyzed. Commercial real estate brokers around the country increasingly are hunting down prime land for massive data-center buildings, from cornfields to abandoned factories, and one firm forecasted that 2026 will bring a 23 percent surge in additional data-center construction spending.
Spending on the construction of power facilities, including for oil and gas facilities, posted one of the top year-over-year gains, of 4 percent, to reach nearly $140 million in October. That was the second-highest total, after manufacturing.
As data centers’ momentum keeps increasing, developers continue to pull back on office space, particularly for financial firms, after the pandemic led chunks of mega-sized properties to sit vacant for years.
Construction spending on financial properties plunged more than 22 percent year over year — the greatest drop among the sectors analyzed. Developer spending on general office construction also fell, by nearly 11 percent, compared to the same time last year.