Data centres forecast to drive commercial growth

Data centre jobs are expected to drive commercial construction growth in the next two years, according to two new reports.

PWC’s construction and housebuilding outlook, which covers 2025-27, said commercial activity’s decline in 2024 was softened by data centre growth, most notably Google’s £800m project in Waltham Cross, Hertfordshire (pictured).

It added that investment has continued to grow since data centres were classified as critical national infrastructure last year.

The report said the sector was growing due to increasing computing requirements from advancing tech such as artificial intelligence, cloud storage and streaming devices.

“The UK remains a leading destination for [data centre] investment, accounting for circa 20 per cent of Europe’s spend in 2024 owing to a friendly legislative environment and strategic geographic location, combined with suitable network infrastructure,” it said.

This benefits MEP contractors in particular, with contractors needed to deliver the vast cooling requirements of the centres.

“Across the value chain we expect to see ‘best-in-class’ providers perform strongly given the high costs associated with [data centre] downtime and the less price sensitive nature of end clients,” it added.

It cautioned though, that huge power consumption of the centres means shortages of batteries, transformers and grid upgrades would need to be navigated.

Overall, PWC predicts 2 per cent growth in the sector between 2025-27, with non-residential commercial projects booming by 4.5 per cent.

Meanwhile, a survey by consultancy Rider Levett Bucknall (RLB) found that 70 per cent of data centre operators and contractors – across the UK and Europe – believe the supply chain is struggling to meet demand.

Some 53 per cent of the 535 executives surveyed believe the sector will be unable to build enough capacity in future years.

A shortage 0f skilled labour and the collapse of ISG, which delivered several data centre projects, are both highlighted in a report accompanying the survey as factors constraining the sector’s potential.

Nikki Venetsanakis, RLB’s head of advanced tech for UK & Europe, said: “Data centre operators and contractors must embrace new strategies – from diversifying supply chains to leveraging technology for improved asset tracking and risk management – to stay ahead.

“Integrating information and data throughout the lifecycle of projects; mapping your supply chain to assess the risks; selecting flexible equipment that accommodates changing designs – all these can help operators and their contractors build a resilient pipeline of data centre projects.”