US data center construction starts hit $84.1bn in the first seven months of 2026, close to three times the same period last year, and the average cost per square foot reached $818.20, up 57% on 2025. ABC says one in six of its members is now under contract on a data center, the highest share on record, while 12.3% of contractors plan to cut headcount. The buildings are getting more expensive far faster than they are getting bigger, and anyone pricing 2027 work off 2025 unit rates is carrying that gap on their own margin.
ConstructConnect’s September data center report has a line in it that should stop any estimator mid-scroll. Among year-to-date projects with known prices and floor areas, the average scheme now costs $1.06bn and covers 701,000 square feet. In 2025 the equivalent figures were $352.8m and 454,400 square feet. Read that twice. The typical project has tripled in cost while growing by about half in size.
That is how you get to $818.20 per square foot, a 57% jump in a single year. Individual projects still range from under $300 to above $2,200 per square foot depending on what is inside them, but the center of gravity has moved hard and fast, and it moved while material inflation in the wider market was nowhere near that pace.
For the contractor on a hyperscale campus, this is the best backlog of their career. For the estimator bidding a hospital in the same metro, it is the reason the electrical package came back well over budget with no explanation attached.
What the $818 number is actually measuring
Cost is rising faster than floor area, and the gap is the story
ConstructConnect’s chief economist Michael Guckes and associate economist Devin Bell put it plainly in the September report: data centers are rising in cost faster than they are growing in size. July alone added $2.7bn across 23 projects, lifting the year-to-date count to 136. The $84.1bn total represents close to a quarter of all US nonresidential building starts this year, down from nearly 30% a year ago, which tells you the rest of the market has started to move a little too.
The report does not break out what is driving the per-square-foot escalation, so it is worth being careful about causes. What we do know from adjacent data is that electrical systems account for somewhere between 45% and 70% of a data center’s build cost according to IBEW estimates, and Turner and Townsend’s cost index has data center labor costs in primary North American markets rising 8% to 12% a year. We covered both in our piece on why every electrician you need is building a data center. A building whose cost is mostly copper, switchgear and the people who install it will reprice on labor and equipment, not on steel and concrete.
The pipeline behind the pipeline
85 more projects and $78.7bn are waiting on a start date before December
ConstructConnect is tracking 85 further data center projects worth a combined $78.7bn with start dates before the end of the year. All of them sit in preconstruction, which means none are guaranteed to break ground, and the report says so explicitly. The South accounts for 71% of that planned value, anchored by Texas, Virginia, Arkansas and Georgia. The Midwest holds 20.2%, mostly Ohio. The West is at 8.7%, concentrated in Utah.
That is where the cost story gets uncomfortable. If those 85 projects were priced 12 to 18 months ago, they were priced against a market where the average scheme cost $352.8m. Some of the gap is design change, because the average project is also 54% larger. Some of it will land as variation on jobs already contracted. Neither is good news for a fixed-price bid. Power infrastructure is riding the same curve, growing from $9bn of starts in 2021 to $37bn in 2025 and running 3% ahead again this year.
- Average project cost. $352.8m to $1.06bn, roughly three times.
- Average project size. 454,400 sq ft to 701,000 sq ft, about 54% larger.
- Average cost per square foot. $818.20, 57% above the comparable 2025 figure.
- Range. Individual projects from under $300 to above $2,200 per square foot.
What ABC’s survey adds
Record participation, thinner staffing, and a backlog gap that just closed a little
Associated Builders and Contractors published its August backlog data on 15 September. The Construction Backlog Indicator rebounded to 8.5 months, up half a month from July’s cyclical low and flat on a year earlier. Roughly one in six ABC members is now under contract on a data center, the highest proportion ABC has recorded. The gap between contractors with data center work and those without narrowed to 9.9 months against 8.3, but chief economist Anirban Basu reads that as more firms getting into the segment rather than the rest of the market recovering.
Then the line that should sit next to every headline about the boom. The share of contractors planning to cut staffing over the next six months rose to 12.3%, the most in any month since December. Confidence in sales and margins improved while the staffing reading fell. Firms expect to make money with fewer people, which is a fair summary of a market where one client type pays a premium for labor and everyone else is trying to protect margin against it.
Data centers continue to keep contractors busy even as activity softens in other segments.Anirban Basu, Chief Economist, Associated Builders and Contractors
What to change in a 2027 bid
The decisions that matter now happen before anyone breaks ground
AECOM president Lara Poloni told Construction Dive this week that the most important decisions on a data center happen long before shovels hit the ground, and that money alone will not get them built. Power, water, permitting and community consent need settling first, and she expects owners to keep pulling that work earlier over the next decade. AECOM has also stopped pursuing design-build in its construction management business, which is a large firm telling you where it thinks the risk sits.
For a mid-market contractor, the read is about pricing basis. A unit rate carried forward from a 2025 tender is now a liability on any electrically intensive building. We looked at the wider exposure in what happens to the rest of construction when the boom slows, and the labor premium does not stay inside the data center fence.
The numbers behind construction cost, before they hit your bid
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| Measure | 2025 | 2026 year to date | Change |
|---|---|---|---|
| Data center starts (Jan to Jul) | Roughly a third of 2026 level | $84.1bn, 136 projects | Close to 3x |
| Average project cost | $352.8m | $1.06bn | About 3x |
| Average project size | 454,400 sq ft | 701,000 sq ft | Up 54% |
| Average cost per square foot | Comparable base | $818.20 | Up 57% |
| Share of US nonresidential starts | Close to 30% | Nearly 25% | Down, rest of market grew |
| ABC members with data center work | 1 in 7 (June 2025) | 1 in 6 (Aug 2026) | Record high |
| Contractors planning staff cuts | n/a | 12.3% | Highest since December |
ConstructConnect’s report shows the average project cost tripling to $1.06bn while average size grew about 54% to 701,000 sq ft, producing a 57% rise in cost per square foot to $818.20. The report does not attribute a cause. Adjacent data points to the electrical share of a data center build, estimated at 45% to 70% of total cost, and to data center labor costs rising 8% to 12% a year in primary North American markets. (Source)
$84.1bn across 136 projects between January and July 2026, close to three times the level of the same period in 2025 and nearly a quarter of all US nonresidential building starts. July added $2.7bn across 23 projects, led by the $1.5bn CyrusOne campus in Texas. (Source)
ConstructConnect is tracking 85 data center projects worth $78.7bn with planned start dates before the end of 2026. The South holds 71% of that value, the Midwest 20.2% and the West 8.7%. All remain in preconstruction and none is guaranteed to break ground. (Source)
Backlog rebounded to 8.5 months in August, up 0.5 months from July and unchanged year on year. Roughly one in six members is under contract on a data center, the highest share on record. Contractors with data center work report 9.9 months of backlog against 8.3 for those without. The share planning to cut staffing over six months rose to 12.3%, the most since December. (Source)
Yes, mainly through labor. Hospitals, schools, factories and utility work draw electricians and commissioning staff from the same pool a hyperscaler is paying a premium for, so wage expectations reset across a metro. Basu’s reading of the August data is that data centers are keeping contractors busy while other segments soften. (Source)
President Lara Poloni says the most important decisions on a data center happen before construction begins, covering power, water, permitting and community concerns, and that owners are seeking advice earlier in the cycle as a result. AECOM no longer pursues design-build contracts in its construction management business. (Source)
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