But contractors struggling to keep up with demand, RLB adds
Two new reports have underlined the importance of the data centre sector – but warnings have been made about contractors struggling to keep up with demand.
According to a report from RLB, more than 70% of over 500 respondents believe the supply chain is struggling to keep pace and 53% fear that the sector will be unable to meet capacity demands.
It said commissioned capacity has surged by nearly 300% since 2023 with an influx of private equity investment intensifying demand for data centre materials and infrastructure.
The market for data centre retrofits is expanding, the report said, with 66% of respondents planning to retrofit at least a quarter of their estates in the next five years.
Meanwhile, a data centre boom is one of the factors behind accountant PwC saying that the UK’s construction and housebuilding sector will grow by around 2% this year.
The report added: “Data centre construction is expected to drive growth in commercial real estate in line with the increase in global demand, not least from the growing usage of AI but also as part of ongoing trends related to cloud migration and use of streaming services.
“The UK remains a leading destination for data centre investment, accounting for c.20% of Europe’s spend in 2024, owing to a friendly legislative environment and strategic geographic location, combined with suitable network infrastructure.”
PwC said a 1.7% growth in the new build commercial sector is forecast for 2025, followed by repeated 2.7% growth in 2026 and 4.5% in 2027.
It said that overall output across construction and housebuilding fell 2.1% in 2024 which it blamed o high interest rates, investor caution in commercial and industrial jobs and delays to several major infrastructure projects.
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