AI boom offers strained construction a lasting fix

Cameco

11/09/2026 16:42

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Jon Sindreu
LONDON, Sept 14 (Reuters Breakingviews) - Talk about a planning conflict: just as Western officials realised they needed more homes to ease the cost-of-living crisis, Silicon Valley began hoovering up all the builders. The AI boom has turned data centres into a rival claimant for scarce electricians, engineers and construction crews. In the short run, this is a problem. Yet mobilising builders at scale also offers a chance to reverse a shortage festering since the 2008 financial crisis.
AI hyperscalers like Amazon.com AMZN.O, Microsoft MSFT.O, Alphabet GOOGL.O and Alibaba 9988.HK are driving one of the century's biggest construction booms. According to consultancy Aegir, the United States and Europe have roughly 158 gigawatts and 66 gigawatts of capacity in the pipeline, respectively. In the U.S., spending by these firms will reach about 3% of GDP annually from 2027 to 2029, Torsten Slok at Apollo Global Management APO.N estimates, up from just 0.6% three years ago. This expansion is faster than the 2000s housing bubble, straining everything from concrete to skilled labour.
Yet the workforce needed is smaller than it once was. Across 15 OECD countries, building employment in 2025 was 2 million workers lower than in 2008, despite total employment being 53 million higher. In many European nations, construction's share of employment has not recovered. This is because construction employment is particularly prone to scarring. The industry is highly cyclical but lacks big pools of neighbouring sectors to tap workers during upswings, especially since it has experienced a decades-long decline in inflation-adjusted pay. Labour shortages then create a persistent resource crunch, research suggests, which the AI boom and tighter migration controls risk making worse.
Take France as an example. The country attracted $69 billion of foreign investment into data centres in the first nine months of 2025, with firms including SoftBank Group 9984.T and Brookfield-backed Data4 announcing major projects. President Emmanuel Macron is leveraging cheap nuclear power, yet his government is simultaneously trying to raise annual house building to 400,000 homes from 300,000. These pressures are compounding. Add the Grand Paris Express public-transport project and Macron's industrial-policy efforts in areas like electric vehicle batteries, and the decline in construction workers, from 7.4% to 6.6% of the total workforce since 2008, becomes a serious constraint. 
To be sure, data centres require fewer builders than comparable apartment blocks. Yet the scale of these projects still creates local bottlenecks. In the U.S., the Associated Builders and Contractors estimated that the construction industry is short roughly 439,000 workers, particularly specialists like electricians and project managers. Those switching to data-centre projects receive salary bumps of 25% to 30%, The Wall Street Journal recently reported, pulling scarce workers away from homebuilding, which is already lagging due to high interest rates.
In the UK, private housing output is 25% below its 2022 peak and private rents are rising at an annual rate of 3.6%, compared with a pre-pandemic average of 2.1%. Across OECD countries, housing demand has generally risen faster than supply.
So far, fears have focused on the pressure data centres exert on local energy costs. This is why, in August, Pennsylvania Governor Josh Shapiro imposed steep requirements on developers, and why many U.S. municipalities have paused new projects. In the Netherlands, the halting a Meta campus in Zeewolde in 2022 was a landmark moment.
This backlash isn't all populist Luddism. Research by Yale College's Ryan Wang estimates that adding 100 megawatts of operational data-center capacity in a U.S. county raises residential fixed electricity charges by 0.7% in regulated markets. While local GDP rises 0.78%, the growth is driven almost entirely by data centers themselves, and a lot of the gain is the one-off construction bump, whereas unemployment rises by 0.7% and manufacturing wages fall by 0.5% — likely because companies try to recoup lower earnings from higher electricity bills. Translate this to mega projects such as the 4.1 gigawatt Stargate build-out in Taylor and Shackelford Counties in Texas, and Wang's model spits out a devastating 8.3% fall in local inflation-adjusted wages.
Still, the better question is whether eventually, when bottlenecks are overcome, data centres create permanent, well-paid tech and telecommunications jobs. A Brookings analysis found that facilities built by specialised landlords like Equinix EQIX.O don't, because they tend to serve remote users, but campuses built by hyperscalers do. Indeed, Northern Virginia and Dublin have both used data centres as a stepping stone to become major tech hubs, because officials pursued a coherent economic strategy, investing in energy, infrastructure, and expanded university programmes. 
As Jane Flegal of the Searchlight Institute argues, AI mania could thus create the political opening needed to fund long-needed upgrades to energy transmission and loosen planning rules. The 2025 U.S. deal with Westinghouse owners Brookfield Asset Management BAM.N and Cameco CCO.TO to build at least $80 billion of new nuclear reactors is one example.
The missing piece is to add housing shortages to the equation. Ireland is a cautionary tale: attracting tech investment proved easier than housing the workers it brought. In the near term, data centres, infrastructure and housing compete for the same builders. In the long run, though, governments could use hyperscaler investment to support larger housing targets. In the UK, for instance, Andy Burnham's government recently pledged to build 70,000 social homes over a decade, which is rather lacklustre. If officials tied major data-centre developments such as Blackstone's BX.N 720 megawatt campus in Blyth — a post-industrial laggard in north-east England — to larger residential construction plans and training schemes, perhaps such ambitions could be raised substantially. 
To find precedents, look at the big postwar reconstruction in Europe under the Marshall Plan, which simultaneously rebuilt homes, factories and transport networks. Even in the U.S., higher residential building started in the 1950s alongside mammoth projects like the Interstate Highway System. This was possible because a long pipeline of work kept construction employment sustainably at around 5.5% of the total non-farm workforce or above, even during recessions. Since the 1980s, the average has been 4.8%.
Officials are now caught between two extremes: reflexively blocking data centres or embracing them with little regard for the strain they put on resources. The winners will be those who fall for neither.
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(Editing by Aimee Donnellan; Production by Streisand Neto)
((For previous columns by the author, Reuters customers can click on SINDREU/Jon.Sindreu@thomsonreuters.com))