Data center construction spending has surged 92.8% through September 2025, reaching $32.9 billion year-to-date, according to the latest ConstructConnect market analysis. This extraordinary growth signals unprecedented demand for computing infrastructure driven by artificial intelligence and cloud computing expansion.
The data center construction market is reshaping regional development patterns and creating massive opportunities for contractors. Three Southern states alone have captured two-thirds of all U.S. data center starts spending, creating a geographic concentration of construction activity that contractors in these regions should understand.
Year-to-date data center starts spending totals $32.9 billion through September 2025—a remarkable 92.8% increase compared to the same period in 2024. This growth rate represents one of the fastest-expanding construction market segments.
Monthly spending patterns reveal the intensity of this boom:
The average data center project costs $193 million, but billion-dollar facilities are becoming increasingly common, with multiple megascale projects breaking ground each month.
For construction firms, the data center boom presents both opportunities and challenges. The scale and technical requirements of data center projects require specialized knowledge, equipment, and workforce capabilities.
Geographic concentration offers advantages for regional contractors. Three Southern states have dominated spending:
These three states account for over $22 billion of the $32.9 billion total—representing two-thirds of all U.S. data center construction spending.
However, Western states are also attracting significant investment:
Data center location decisions are driven by electricity availability and cost, water availability for cooling, regulatory environment, and grid capacity. Contractors should anticipate continued geographic concentration in these energy-abundant regions.
The real growth story lies in the pipeline. ConstructConnect is tracking 39 data center projects in late-stage preconstruction worth a combined $25.5 billion with planned starts before year-end 2025. Should all these projects break ground as scheduled, annual 2025 spending would exceed $58 billion—more than double 2024's record high.
Looking further ahead, 52 additional data center projects worth over $40 billion are in final preconstruction phases with start dates in the next six months.
The five largest upcoming projects, valued at $35 billion combined, are concentrated in three states:
These three states account for over 90% of the planned $35 billion in major projects. Near-term starts in other states include Texas ($2.8 billion) and Arizona ($692 million).
The 3-year compounded annual growth rate (CAGR) for data center construction has reached 98.7%—meaning the market is essentially doubling every year. This growth trajectory is unprecedented in construction market history.
Data center construction success depends on three critical infrastructure factors: electricity, water, and regulatory alignment. As these factors shift, geographic construction patterns will transform.
Rising construction costs are already affecting project economics. ConstructConnect's November report specifically notes that "surging costs of construction" could limit future growth. Contractors should anticipate continued cost pressures from materials, labor, and equipment availability.
The energy infrastructure impact is substantial. ConstructConnect expects full-year 2025 power infrastructure starts spending to show cooling compared to 2024's record high. However, strong energy demand is expected to drive annual power infrastructure spending exceeding $30 billion in coming years.
Three key developments will shape data center construction in 2026 and beyond:
1. Supply Chain and Labor Availability: With 39 projects potentially breaking ground before year-end and $40 billion+ in near-term projects, labor availability and supply chain capacity will be tested. Contractors should prepare workforce scaling strategies now.
2. Energy Policy and Regulatory Changes: Federal policy on renewable energy, nuclear power, and grid infrastructure will influence data center location decisions. Recent cancellation of $679 million in offshore wind funding signals regulatory uncertainty that could redirect data center investment inland.
3. Technology-Driven Project Evolution: AI infrastructure requirements are driving data center design changes. Projects are becoming larger, more technically complex, and more specialized. Contractors need capabilities in advanced cooling systems, power distribution, and automation technologies.
The data center construction boom represents one of the most significant market opportunities for contractors in decades. However, success requires specialized expertise, geographic proximity to the concentrated construction activity, and readiness to scale operations rapidly.
Sources: ConstructConnect, "November Data Center Report: Spending Surges 92.8% as Southern States Dominate Construction," November 6, 2025. Data includes ConstructConnect Project Intelligence tracking of data center construction starts through September 2025.
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