Data Center Construction Surges as Other Sectors Shrink

Investment in artificial intelligence infrastructure is reshaping the US construction industry, with data center projects expanding rapidly while several traditional building sectors contract. Data from Harvard Kennedy School economist Jason Furman, highlighted in an October 11, 2026, essay by writer and podcaster Derek Thompson, shows that data center construction spending increased 64.5% over the latest year, far outpacing other categories.

The divergence raises questions about the breadth and durability of economic growth tied to artificial intelligence. A separate Business Insider report published October 12, 2026, examined how the data center construction boom is creating entrepreneurial opportunities in communities hosting major projects, while raising questions about whether those benefits can last.

According to Furman's figures cited by Thompson, new energy infrastructure construction grew 4.1% over the same period. The increase coincides with rising electricity demand from the expansion of AI infrastructure, although the available figures do not establish how much of the growth is directly attributable to data center development.

Other construction categories recorded declines. Multifamily housing construction fell 5.6%, while healthcare and commercial retail construction each dropped 10.1%. Educational construction declined 12.6%, and manufacturing construction contracted nearly 24% from 2025 to 2026, according to the data presented in Thompson's analysis.

The contrasting figures show that construction investment is increasingly concentrated in data centers rather than spread across a broad range of industries. Manufacturing construction, in particular, has weakened despite the Trump administration's stated focus on expanding the sector, as described in the source analysis.

Data center development also generates business opportunities beyond the facilities themselves. Business Insider reported that hyperscalers have promised economic spillover benefits for towns where projects are built, creating openings for entrepreneurs and service providers that support construction operations.

One example is National Jobsite Catering, which serves about 1,500 meals on an average day at each of its dozen data center construction sites, according to the accompanying Business Insider image caption. The operation illustrates the demand for food services associated with large construction workforces.

These local business opportunities depend in part on continued construction activity. Business Insider's report raised the question of whether the economic gains reaching host communities can persist as the data center buildout evolves.

The outlook also depends on investor confidence in AI spending. Thompson's analysis noted growing skepticism among investors about the sustainability of investment in artificial intelligence, creating uncertainty over whether the current pace of data center construction can continue.

The construction figures cover the latest annual period discussed in the October 2026 analysis, with data center construction up 64.5% and manufacturing construction down nearly 24% between 2025 and 2026. The available source material does not provide a forecast for when those trends might change.