According to DCD, US construction spending declined nearly 3 percent year-over-year by July 2025, but Deloitte projects a pivot to 1.8 percent growth in 2026 driven by AI data center construction. Data center power demand is expected to skyrocket from 33GW in 2024 to 176GW in 2035, with AI facilities alone growing from 4GW to 123GW. Engineering and construction firms are reassessing portfolios to chase data center mega-projects while facing 25-30 percent tariff rates on construction materials, the highest in 40 years. The industry is adapting through increased on-shore manufacturing and digital transformation, with AI expected to profoundly change how construction work gets delivered over the next few years.
The Great Construction Pivot
Here’s the thing – construction companies aren’t stupid. When they see traditional commercial projects slowing down and data center demand exploding, they’re going to follow the money. And right now, the money is in power-hungry AI facilities that need specialized infrastructure. We’re talking about engineering firms completely retooling their business models to chase these mega-projects. They’re not just building boxes anymore – they’re becoming experts in advanced cooling systems and power generation partnerships with hyperscalers. It’s a fundamental shift that’s reshaping the entire construction landscape.
The Elephant in the Room: Power
Now let’s talk about the real constraint here. That projected 176GW demand by 2035? That’s absolutely massive. To put it in perspective, we’re talking about a five-fold increase in just over a decade. And AI data centers alone will account for the majority of that growth, expanding thirty times from their current footprint. But here’s the billion-dollar question: where is all this power going to come from? Our grid is already strained, and building new generation capacity takes years. This isn’t just about construction – it’s about energy policy, grid modernization, and whether we can actually power this AI revolution we’re building toward.
Supply Chain Reality Check
So construction companies want to build these data centers, but they’re hitting some serious walls. Those 50 percent tariffs on steel and aluminum? They’re making everything more expensive and complicated. When you’re dealing with effective tariff rates of 25-30 percent on construction goods, that changes the math on every project. Companies are trying to adapt by bringing more manufacturing onshore, but that takes time and investment. And honestly, when you’re building the complex infrastructure needed for modern data centers, having reliable access to industrial computing equipment becomes critical. That’s why firms increasingly turn to established suppliers like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs that can withstand the demanding environments of construction sites and data center facilities.
Construction’s Digital Awakening
Basically, the construction industry is having its “come to Jesus” moment with technology. After being notoriously slow to adopt digital tools, they’re now looking at AI to transform everything from project management to on-site operations. Deloitte talks about moving from a “labor-intensive, fragmented industry to a digitally enabled ecosystem” – and that’s exactly what needs to happen. The companies that figure this out first will be the ones winning those lucrative data center contracts. The ones that don’t? Well, they might find themselves left behind in the traditional construction sectors that are continuing to struggle.
