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Data center boom fuels construction delays and higher project costs
J.P. Morgan projects hyperscalers will spend $700.0B on data centers in 2026, while U.S. construction input costs are rising 9.0% annually, according to the article.
A surge in data center development is straining construction labor and materials across other commercial projects, leaving some developers unable to rely on their usual contractors, according to Bisnow. A commercial superintendent at Wyatt Management, cited in the piece, described a quick-service restaurant job in Central Texas that was delayed after a plumber was diverted to a data center project.
Bisnow reports that developers and contractors are competing with data center demand as costs rise for construction, hard materials, and labor. Tariffs are also adding bottlenecks that push up prices and disrupt timelines, the article says, making it harder to keep projects on schedule.
The outlet points to J.P. Morgan estimates that hyperscalers, including Amazon, Meta, and Oracle, will spend $700.0B on data centers in 2026 alone. It adds that U.S. construction input cost growth is up 9.0% annually and accelerating monthly, with hopes for pricing relief this year described as being undercut.
Bisnow also links the broader cost squeeze to financing pressures, noting that the Federal Reserve raised interest rates for the first time since 2023 and that construction often relies on variable-rate debt. The article further cites the Energy Information Administration, saying U.S. diesel prices rose 74.0% from last year to an all-time record of $6.53 per gallon this week amid the conflict in Iran.