The U.S. is in the midst of an unprecedented data center construction boom, presenting immense opportunities for mechanical contractors specializing in HVAC, piping, and fabrication. This surge, fueled by the insatiable demand for digital infrastructure like cloud computing and AI, saw data center projects account for over 70% of the increase in private nonresidential construction spending between March 2024 and March 2025. Investment in U.S. data center construction is projected to grow to over $112 billion by 2030, a nearly 15% compound annual growth rate.
We are writing about this topic because here at Novarc, many of our customers are competing for and winning data center projects. These projects are lucrative, complex, and require high throughput and quality to meet tight deadlines. Below is an overview to give you a general understanding of this fascinating industrial boom.
Why the Explosive Growth?
Tech giants such as Amazon Web Services, Microsoft, Google, and Meta are rapidly expanding their server farm footprints, with a planned global spend of $315 billion on data center expansion in 2025 alone. The rise of artificial intelligence (AI) is a significant catalyst, with data center power demand potentially growing 160% by 2030 and accounting for 44% of U.S. electricity load growth from 2023 to 2028. This “always online” economy, encompassing e-commerce, streaming, 5G, and IoT, demands more secure facilities for servers, storage, and networking gear. Even as other construction sectors slow, data center spending has soared, making it a high-growth segment.
Where the Boom is Happening
While widespread, key hotspots include Northern Virginia, Atlanta, Dallas/Fort Worth, Chicago, and Phoenix, boasting fiber connectivity, available land, and favorable power costs and tax incentives. Northern Virginia alone added roughly 1 gigawatt of new capacity in 2024. Secondary markets are also emerging due to power constraints in traditional hubs, with Texas (Austin/San Antonio), Ohio (Columbus), Iowa, Indiana, and Denver seeing significant activity. States like Virginia, Texas, Ohio, and Arizona currently have the most construction activity.
Mechanical Systems: The Heart of a Data Center
Mechanical contractors must understand the critical role of HVAC and piping. Cooling is paramount, with HVAC systems often consuming 50% or more of a data center’s energy if not optimized. Chilled water cooling systems, utilizing industrial chillers, a network of pipes, and Computer Room Air Handler (CRAH) units, are the most cost-effective solution for large data centers. Water’s superior heat capacity (4,000 times that of air) makes liquid cooling highly efficient.
Piping systems are the “arteries and veins” of these networks, typically using carbon steel for main lines and copper for smaller ones, often joined by welding for strength and leak-tightness. Mechanical scope also includes fuel piping, plumbing, and fire suppression, all requiring tight coordination, often via Building Information Modeling (BIM).
Winning Data Center Jobs: Strategies for All Contractors
For small and mid-sized contractors, success hinges on:
- Niche Expertise and Certifications: Training in mission-critical HVAC, chiller systems (Trane, Carrier, York, Daikin), and advanced welding (ASME certifications).
- Emphasize Reliability: Highlight quality workmanship, thorough commissioning, and experience in other critical facilities like hospitals.
- Leverage Prefabrication: Offer pre-assembly of piping, pump skids, or coil packages off-site to reduce on-site labor and accelerate schedules.
- Proactive Networking: Directly engage data center facility managers and join industry groups like AFCOM.
- Start Small, Scale Up: Consider subcontracting or taking on maintenance contracts to build experience.
- Financial Readiness: Demonstrate bonding capacity and a solid safety record.
For large contractors, the focus is on maintaining an edge:
- Early Engagement: Offer preconstruction services and align with clients from the concept design stage [constructiondive.com].
- Double Down on Prefabrication: Invest in dedicated facilities for modular construction, which reduces time, improves quality, and protects margins.
- Mitigate Supply Chain/Labor Risks: Strategic procurement (early ordering of equipment) and investing in workforce development.
- Efficiency and Continuous Improvement: Implement Lean Construction methodologies and standardize repetitive tasks.
Strict Quality and Commissioning: Implement robust testing plans and consider third-party commissioning agents to ensure flawless performance.
Client Collaboration: Maintain transparency and align your approach with the client’s business drivers (e.g., speed to market vs. cost control).
General Tips for All:
- Know Data Center Types: Understand the difference between hyperscale and colocation facilities to tailor bids [buildops.com].
- Highlight Mission-Critical Experience: Emphasize any track record of zero unplanned outages.
- Safety and Security First: Adhere to strict safety protocols, background checks, and confidentiality rules.
- Financial Strength and Insurance: Ensure robust bonding capacity and high umbrella liability coverage [axaxl.com]. Consider cyber liability insurance if offering software/controls services
- Leverage Technology: Utilize BIM, project management software, and prefab design software.
- Rapid Response: If offering facility support, advertise 24/7 rapid response capabilities [buildops.com].
- Realistic Pricing: Be competitive but avoid underbidding; sell on best value and technical expertise.
- The data center boom is a significant opportunity. By investing in the right skills, embracing innovation, and building a reputation for dependable delivery, mechanical contractors can secure lucrative projects and become key players in building the infrastructure of our digital future.
Data, statistics, and technical info were collected to write this article from the following websites:
www.constructiondive.com
www.arizton.com
www.fierce-network.com
www.axaxl.com
www.naiop.org
www.buildops.com
www.datacenterdynamics.com