Survey shows decline in data center building boom. Martynek disagrees.

Construction Dive reported on PSMJ’s quarterly market forecast showing potential cracks in the data center construction boom, with 26% of architecture and engineering firms reporting decreased proposal activity. However, DataBank CEO Raul Martynek disagreed with the assessment, maintaining confidence in continued robust data center development.

While PSMJ data showed only 10% of respondents reporting increased data center proposal opportunities in Q3 2023, making it the fifth-largest slowdown among 58 submarkets surveyed, industry observers noted contradictory trends. CBRE reported data center construction activity increased 25% year-over-year to a record 2,288 megawatts in the first half of 2023.

“The sector itself has been doing very well over the last five to seven years, and there’s been a noticeable acceleration in the last 24 months. We expect the pace of data center development, absorption and hence construction to remain robust over the next couple of years.”
— Raul Martynek, CEO of DataBank

Martynek highlighted that hyperscalers account for 60% to 70% of new data center absorption and continue aggressively buying land for future development. However, he noted supply chain challenges with generators, power systems, and electrical equipment threatening construction timelines.

Construction timelines have extended from one to three years historically to two to six years currently, primarily due to power availability constraints and infrastructure requirements.

See Construction Dive’s complete market analysis here.