Data center construction is now the most capacity-constrained sector globally, driven by the rapid growth of AI infrastructure and labor shortages.
The rapid buildout of AI infrastructure is turning data centers into the world’s most capacity-constrained construction sector, intensifying competition for specialist contractors, and increasing cost and schedule risks.
Turner & Townsend’s Global Construction Market Intelligence 2026 report, covering 112 markets in 44 countries, found that over 70% of markets reported data center contractor capacity as tightening or overstretched.
Nearly 90% of respondents cited shortages in mechanical, electrical, and plumbing trades. In the construction sector, about 71% reported labor shortages, making workforce availability the leading source of cost escalation.
The report found data centers lead global construction demand, followed by industrial and logistics projects.
Wannie Park, CEO and founder of data center orchestration company Pado AI, says the widening skilled labor gap is forcing data center developers to rethink where and how facilities are assembled.
US data center construction and operations will need roughly 650,000 workers to support the 2026 growth,” Park says.
He says prefabrication of electrical skids, cooling modules, and power rooms cuts onsite labor demand by 20-40%, and the underlying design logic is the same across approaches: pull complexity out of an exposed, variable construction site and into a controlled environment where it can be engineered, quality-checked, and tested with precision.
Park also said that modular designs are expanding beyond containerized systems to scalable units of 10 megawatts or more.
The MEP Bottleneck #
For data centers, the labor problem is not simply a shortage of general construction workers. The most difficult positions to fill are those related to the electrical and thermal demands of dense AI systems. “The most challenging critical roles to fill are currently senior electrical leads, HVAC professionals at the forefront of newer cooling technologies, and commissioning agents and engineers,” Lisa Duignan, director of global data centers at Turner & Townsend, told Data Center Knowledge.
Owners and contractors are responding with more offsite manufacturing, improved building information modeling coordination, and data center-specific apprenticeship programs, measures that can extend the productivity of existing teams while creating a pipeline of workers trained for highly serviced facilities.
Building Beyond the Job Site #
Modular construction was gaining ground before the AI boom, but the need to deliver capacity faster is accelerating the shift toward prefabricated components and factory-based production.
“Over the past decade, the data center construction industry had already been pivoting to modular components,” Duignan says. “The difference now is the speed of deployment.”
She explains the demand for AI infrastructure with hyperscale capex spend estimated to hit $700 billion this year is accelerating investment in offsite manufacturing innovations.
This requires developers to reserve manufacturing capacity and align designs with suppliers sooner, rather than waiting until plans are largely complete.
New Markets, Longer Partnerships #
Location is becoming another capacity-management tool. Workloads that are less sensitive to latency can be placed outside established hubs, opening secondary or emerging markets where power connections may be easier to secure.
That flexibility does not eliminate risk. A new market may offer power, but lack the specialist workforce and supplier base required for a fast, technically complex build. Developers must evaluate labor depth and delivery capability alongside land, energy and network connectivity.
Long-term relationships with contractors and equipment suppliers can provide greater visibility into competing projects, funding commitments, production capacity and likely costs.
The advantage will go to companies able to adapt their delivery models, rather than procuring every facility as a one-off build.
Duignan says one of the key success factors will be how quickly organizations can adapt their existing project execution methodology.
“The most successful are likely to be those with the agility and capital to maximize all avenues available to advance delivery schedules; including alternative power delivery strategies, standardized designs enabling greater offsite manufacturing, and leveraging supply chain partnerships and alliances to support construction delivery and equipment production capacity,” she says.