AI data center demand is fueling labor shortages and skills pressure across the global construction market, according to Turner & Townsend's latest Global Construction Market Intelligence report. The professional services firm also found that the infrastructure boom will create jobs rapidly and spur new construction methods over the coming years.
The report, released July 8, shows that global construction demand is strongest in the data center and industrial and logistics sectors, with renewables and clean energy also seeing steep increases. North America recorded the highest regional labor construction costs, driven primarily by tight labor availability, followed by the European Union. Australia and New Zealand faced the largest labor shortages, ahead of the EU and Asia.
Labor shortages hit 71% of markets
Some 71 percent of the markets covered in the report experienced labor shortages. That tightness is reshaping where contractors and suppliers put their resources. Data center projects, which typically carry higher margins, are pulling firms away from conventional residential and commercial work. Those traditional sectors now face pressure to reassess their commercial viability, Turner & Townsend said.
The firm described the current market as "two-speed," with geopolitical tensions and economic uncertainty limiting investor confidence in traditional construction, while AI infrastructure draws concentrated investment. This shift has pushed contractors and suppliers toward what the report calls "tech-led" opportunities.
Data center boom strains contractor capacity
Data centers have become "the most constrained sector globally" for contractor capacity. Over 70 percent of the 112 markets analyzed saw tightening or overstretched capacity in the sector. By contrast, 79 percent of more traditional sectors - hospitality, residential, and commercial - were balanced or had spare capacity.
Turner & Townsend said this imbalance is "raising the likelihood of a severe shortfall in the skilled labor to build data centers," and it is fueling calls for more training and recruitment. The findings underscore the growing need for skills development in AI-related construction areas. AI for Real Estate & Construction Courses are one resource that construction professionals are turning to as they adapt to the shifting demand.
"The global construction market is shifting, and new dynamics are reshaping the key drivers of cost performance," said Stephanie Marshall, managing director of real estate cost management at Turner & Townsend. "Demand is increasingly uneven and concentrated on AI-driven sectors like data centers, while broader labor constraints, supply chain volatility and geopolitical risk are becoming more pronounced."
Marshall added: "There is a very real risk that growth in the pool of skilled labor needed to build data centers won't keep up with demand. In construction, AI has the potential to be a force for good in terms of job creation, but only if the right resources are put in place to support it."
Amid the volatility, construction input costs have stabilized, and supply chain resilience built up after the Covid-19 pandemic has limited broader macroeconomic impacts, the report found.
Why this matters for real estate and construction professionals
The concentration of demand in data centers is creating a bifurcated market. Firms working in residential and commercial construction face weaker pipelines and margin pressure, while those in tech-heavy sectors deal with overheating demand and scarce labor. The report makes clear that the skills gap is not a future concern - it is already limiting contractor capacity in most markets. For construction professionals, the near-term priority is to secure the skilled labor and training pipelines needed to deliver on AI infrastructure projects, or risk losing out to competitors who do.
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