Demand for AI data centers is putting pressure on the global construction market by increasing labor shortages and skills pressures, a report from Turner & Townsend has found.However, the professional services firm said that AI infrastructure growth would drive rapid job creation and “innovative new construction approaches” over the coming years.Turner & Townsend’s Global Construction Market Intelligence report found that global construction demand was highest in the data center and industrial and logistics sectors. The renewables and clean energy sector has also experienced significant demand increases.North America had the highest regional labor construction costs, followed by the EU, with labor availability the main driver of cost increases. Australia and New Zealand saw the largest labor shortages, followed by the EU and Asia.Some 71 percent of markets covered in the report experienced labor shortages.Turner & Townsend said the current market was “two-speed,” with geopolitical tensions and economic challenges, mixed with workforce and supply chain constraints, limiting investor confidence in traditional construction sectors, while AI infrastructure draws increased investment.This has resulted in contractors and suppliers focusing on “tech-led” opportunities, such as data centers, which generally have higher margins. Traditional sectors, such as residential and commercial, are now being forced to reposition and reassess their commercial viability.However, Turner & Townsend said growth in AI has led to data centers becoming “the most constrained sector globally” when it comes to contractor capacity, with over 70 percent of the 112 markets analyzed in the report seeing tightening or overstretched capacity.Whereas 79 percent of more traditional sectors, such as hospitality and leisure, residential, and commercial, were balanced or saw spare capacity.Turner & Townsend said this was “raising the likelihood of a severe shortfall in the skilled labor to build data centers,” fueling calls for more training and recruitment efforts.Amid this volatility, construction input costs have stabilized and supply chain resilience, built up in the wake of the Covid-19 pandemic, has limited macroeconomic impacts.“The global construction market is shifting, and new dynamics are reshaping the key drivers of cost performance,” said Stephanie Marshall, managing director, real estate cost management, at Turner & Townsend, “Demand is increasingly uneven and concentrated on AI-driven sectors like data centers, while broader labor constraints, supply chain volatility and geopolitical risk are becoming more pronounced.”She added: “There is a very real risk that growth in the pool of skilled labor needed to build data centers won’t keep up with demand. In construction, AI has the potential to be a force for good in terms of job creation, but only if the right resources are put in place to support it. Additionally, the impact on energy prices of the conflict in the Middle East will be indirect and uneven, varying by geography and sector depending on supply chain structure and energy dependence.”