The Data Center Cost Index for 2023 has shown that 83% of respondents reported that data center construction struggled to meet industry demand in 2023. This increased demand has not been cooled by rising costs, as the average cost of global data center construction has increased by 6%. This follows an 8% cost increase in 2022, according to a new report from Turner & Townsend, cited by ConstructionTechnology.

The sector is also suffering from labor and material supply constraints, with over 80% of respondents reporting project delays in the past year due to the global materials shortage. More than a third of these delays were 12 weeks or longer.

Faced with supply chain constraints, some are exploring creative ways to expand the potential pool. For example, 66% report that data centers are delivered using alternative procurement models to meet demand.

Clients are adapting procurement models, moving from procuring a single general contractor to major packages such as shell and core, and combining the use of local and international contractors.

In addition to reevaluating procurement methods, many are ordering long-lead items before the design is finalized, while others are moving towards greater prefabrication.

The report also revealed the most expensive places to build data centers:

1. Tokyo, Japan
2. Zurich, Switzerland
3. Silicon Valley, USA
4. New Jersey, USA