Data Center Developers Face Tighter Margins as Construction Costs Rise
Data Center Knowledge, Thursday, October 15th, 2026
JLL says 3% to 6% annual construction inflation is the new baseline, squeezing projects without power or anchor tenants.
JLL's Global Construction Costs Index 2026 says annual construction cost escalation of 3% to 6% is now the baseline, up from 2% to 3% before 2020, with a further 3.1% to 4.2% rise in tender prices forecast for 2027.
Strong AI demand does not protect projects lacking power certainty, anchor tenants and credible delivery timelines.
JLL's Matthew Giddings recommends reassessing projects when costs erode returns or utility schedules slip, and using phased construction to match spending with confirmed power and demand.
Electricians, high-voltage specialists, pipefitters, cooling technicians and commissioning teams are the tightest labor constraints.