{"id":30970,"date":"2025-06-19T05:51:17","date_gmt":"2025-06-19T12:51:17","guid":{"rendered":"https:\/\/essential.construction\/news\/contractors-say-data-center-demand-still-growing-despite-bubble-fears\/"},"modified":"2025-06-19T05:51:17","modified_gmt":"2025-06-19T12:51:17","slug":"contractors-say-data-center-demand-still-growing-despite-bubble-fears","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/contractors-say-data-center-demand-still-growing-despite-bubble-fears\/","title":{"rendered":"Contractors say data center demand still growing, despite bubble fears"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<div class=\"text-to-speech\">\n    <button class=\"text-to-speech__button button\"><\/p>\n<p>            <img decoding=\"async\" class=\"text-to-speech__button__icon\" src=\"https:\/\/www.constructiondive.com\/static\/images\/audio_icon.svg?482016190122\" alt=\"-\"><\/p>\n<p>        Listen to the article<br \/>\n        <span class=\"text-to-speech__button__audio-length\">7 min<\/span><br \/>\n    <\/button><\/p>\n<div class=\"text-to-speech__controls\">\n        <audio controls=\"\" class=\"js-text-to-speech\" preload=\"none\"><source src=\"https:\/\/res.cloudinary.com\/dmgi9movl\/video\/upload\/q_1\/v1750191774\/news\/text_to_speech\/contractors-data-center-demand-growing-bubble-fears_r1sndw.wav\" type=\"audio\/mp3\"><\/source><\/audio><\/p>\n<div class=\"text-to-speech__controls__text\">\n            This audio is auto-generated. Please let us know if you have <a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/contact\/\" target=\"_blank\">feedback<\/a>.\n        <\/div>\n<\/p><\/div>\n<\/div>\n<p><span><span><span><span><span><span>Amid concerns of a data center slowdown or even a bubble, contractors on the ground are still buried in early-stage activity and navigating more project complexity than ever.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Investment has poured into creating new massive data centers in 2025. The sector accounted for more than <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/construction-spending-plummets-tariff-fears\/746946\/\" target=\"_blank\"><span><span><span><span><span><span><span>70% of the increase<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> in private nonresidential construction spending between March 2024 and March 2025.\u00a0 Meanwhile, planning on these projects has largely bolstered <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/warehouse-hotel-construction-commercial-planning\/750373\/\" target=\"_blank\"><span><span><span><span><span><span><span>overall construction planning<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> this year, according to Dodge Construction Network.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>But a recent pullback from some major tech players has raised concerns about whether the sector can continue this momentum.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>For example, Microsoft, one of the biggest backers of the data center construction boom, <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/apnews.com\/article\/microsoft-ai-data-center-pause-ohio-4d987fe8446fc9e6cda31d919f938911\" target=\"_blank\"><span><span><span><span><span><span><span>recently paused work<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> on both its $1 billion data center in Ohio and its $3.3 billion campus in Mount Pleasant, Wisconsin, according to The Associated Press. A <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.nytimes.com\/2025\/06\/02\/business\/ai-data-centers-private-equity.html?unlocked_article_code=1.L08.WcIC.ktjaL_tmMNBH&amp;smid=url-share\" target=\"_blank\"><span><span><span><span><span><span><span>New York Times article<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> recently posed the question of whether data centers are on the precipice of a bubble.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Yet other tech giants and chipmakers continue to forecast strong demand for data infrastructure despite these signals.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>For example, Amazon unveiled plans to <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/amazon-pennsylvania-data-centers-invest\/750284\/\" target=\"_blank\"><span><span><span><span><span><span><span>invest at least $20 billion<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> on two data center facilities in Pennsylvania as recently as June 9. That kind of investment reflects broader momentum across the sector, said John Arcello, advanced technology core market co-leader at DPR, a Redwood City, California-based general contractor.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Key factors such as power access, land availability and speed to market, all remain as competitive advantages for regions wooing these builds, added Brett Helm, general manager of the Southwest division at Graycor Construction, an Oakbrook Terrace, Illinois-based general contractor.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cActivity is very high. You see more and more contractors trying to get in the data center business,\u201d said Helm. \u201cIt\u2019s still very, very viable.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>That sentiment holds across both major hubs and emerging data center markets, said Ike Keene, vice president of commercial at Caddell Construction, a Montgomery, Alabama-based general contractor. Primary hubs include northern Virginia, Atlanta, Chicago and Phoenix, according to a recent <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.cbre.com\/insights\/reports\/north-america-data-center-trends-h2-2024\" target=\"_blank\"><span><span><span><span><span><span><span>data center report from CBRE<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>, a Dallas-based commercial real estate services firm.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cOur data center clients are continuing to move forward with new work,\u201d said Keene. \u201cWe have witnessed a steady growth mode in the data center hub locations, but are also seeing an uptick of new work in the secondary markets.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<h3 class=\"standard-heading\"><span><span><span><strong><span><span>New entrants<\/span><\/span><\/strong><\/span><\/span><\/span><\/h3>\n<p><span><span><span><span><span><span>While experienced owners continue to build aggressively, a wave of new clients entering the space is changing early-stage work, said Chris Teddy, national director of mission critical at Kansas City, Missouri-based JE Dunn Construction. This influx has recently jammed preconstruction pipelines and placed further pressure on contractors, he added.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cPreconstruction is more bogged down than we\u2019ve seen in a long time, as new players work to get a pulse on the market to understand what it truly takes,\u201d said Teddy. \u201cAs they move further upstream, it\u2019s created added strain on our preconstruction team as they try to help these newcomers understand how to tackle the market.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>However, even with this strain, activity continues to boom.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Teddy said <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/data-center-boom-fuels-nuclear-construction-projects\/733278\/\" target=\"_blank\"><span><span><span><span><span><span><span>power constraints<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> are pushing developers into new geographic markets and prompting innovative infrastructure solutions, such as onsite generation or dedicated substations.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cThe data center market continues to gain momentum, showing no signs of slowing down as demand reaches an all-time high,\u201d said Teddy. \u201cThe pace of development is only accelerating.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<h3 class=\"standard-heading\"><span><span><span><strong><span><span>Meeting resistance<\/span><\/span><\/strong><\/span><\/span><\/span><\/h3>\n<p><span><span><span><span><span><span>Other builders echoed that optimism, but pointed to a growing list of headwinds.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>For instance, long equipment lead times, power access issues and labor shortages are forcing more strategic planning across the board, said Arcello.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<section class=\"storylines-carousel-wrapper hide-small show-large\" id=\"desktop-carousel\"\/>\n<p><span><span><span><span><span><span>\u201cThe general sentiment in the data center construction industry right now is cautiously optimistic,\u201d said Arcello. \u201cWe\u2019re seeing strong growth driven by the rapid acceleration of AI and the insatiable demand for cloud computing.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Arcello said clients are now bringing in contractors earlier than ever to help evaluate site conditions, entitlement risks, energy procurement and utility interconnection timelines.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cWe\u2019re seeing strong activity in the early planning stages. Preconstruction services and capabilities have become a true differentiator,\u201d said Arcello. \u201cEarly engagement is critical to stay on track.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>That aligns with Keene\u2019s experience, who added the need for <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/gilbane-procurement-platform-nextdirect\/750783\/\" target=\"_blank\"><span><span><span><span><span><span><span>accurate cost forecasting<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> has grown significantly. That\u2019s especially true as <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/new-steel-aluminum-tariffs-push-construction-costs-higher\/749931\/\" target=\"_blank\"><span><span><span><span><span><span><span>new tariffs<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> add a fresh layer of volatility to material prices, said Keene.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cThe newly adopted tariffs have become a <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/construction-costs-jump-tariff-iron-steel-aluminum\/750735\/\" target=\"_blank\"><span><span><span><span><span><span><span>new variable in cost control<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>,\u201d said Keene. \u201cWe are adapting day by day for accurate current and future pricing structures to aid our clients in forecasting for the future.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>To help stay ahead, contractors are turning to prefabrication more aggressively. On remote sites, Arcello said teams are increasingly building components offsite in labor-rich regions and transporting them to projects. That helps ease skilled trade constraints and minimize rework, he said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Meanwhile, procurement has become a battleground. Equipment such as transformers, switchgear and uninterruptible power supply systems can now carry lead times that exceed 60 weeks, and prices for copper, aluminum and specialty mechanical gear remain volatile. That\u2019s pushed contractors to lock in packages earlier, said Arcello.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Yet, overall, the data center construction market seems only to have gained momentum in 2025, contractors say.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<section class=\"storylines-carousel-wrapper show-small hide-large\" id=\"mobile-carousel\"\/>\n<p><span><span><span><span><span><span>\u201cThere\u2019s no question that demand for data center construction is booming,\u201d said Teddy. \u201cWith so much activity, remaining diligent on procurement and preconstruction is more important than ever. Getting ahead of supply chain constraints and cost volatility can make all the difference.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/www.constructiondive.com\/news\/contractors-data-center-demand-growing-bubble-fears\/750985\/\" rel=\"nofollow noopener\" target=\"_blank\">This article was originally posted at Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Listen to the article 7 min This audio is auto-generated. Please let us know if you have feedback. Amid &#8230; <a title=\"Contractors say data center demand still growing, despite bubble fears\" class=\"read-more\" href=\"https:\/\/essential.construction\/news\/contractors-say-data-center-demand-still-growing-despite-bubble-fears\/\" aria-label=\"Read more about Contractors say data center demand still growing, despite bubble fears\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[457],"tags":[],"class_list":["post-30970","post","type-post","status-publish","format-standard","hentry","category-construction-dive","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/30970","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/comments?post=30970"}],"version-history":[{"count":0,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/30970\/revisions"}],"wp:attachment":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/media?parent=30970"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/categories?post=30970"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/tags?post=30970"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}