AI boom fuels data centre growth but intensifies UK construction skills shortage
- constructnetuk
- Jul 8
- 2 min read
The rapid growth of AI infrastructure and data centres is placing increasing pressure on the UK construction industry, with new research warning that contractor capacity and skilled labour are struggling to keep pace with demand.
According to Turner & Townsend’s 2026 Global Construction Market Intelligence Report, data centres have become the second most in-demand construction sector in the UK, behind defence, as investment in artificial intelligence continues to accelerate.
The report found that more than 70% of global construction markets are experiencing constrained contractor capacity for data centre projects, making the sector the most stretched worldwide. In the UK, shortages are particularly severe across mechanical, electrical and plumbing (MEP) trades, with every respondent identifying skills shortages in these critical disciplines.
While demand for AI infrastructure continues to
surge, more traditional sectors such as residential housing and commercial office development remain comparatively subdued.
Labour shortages are now regarded as the biggest driver of construction cost inflation, replacing the global supply chain disruptions that dominated recent years.
Turner & Townsend expects UK construction inflation to increase to 3.7% in 2026 and 4.2% in 2027, while London remains the country’s most expensive location to build. Regional cities including Birmingham, Edinburgh and Glasgow are also forecast to see rising cost pressures as major regeneration and infrastructure programmes continue.
Stephanie Marshall, Managing Director of Real Estate Cost Management at Turner & Townsend, said the construction industry must significantly expand its skilled workforce if it is to meet the growing demand created by AI and data centre investment.
The findings highlight a significant shift in the UK construction market, with AI, defence and industrial projects driving demand for specialist contractors, while increasing competition for skilled labour is expected to remain one of the industry’s biggest challenges over the coming years.
