Data-center construction is creating more business for construction crews, material suppliers and professional services firms across parts of the Southeast. It is also bringing higher costs that may complicate the benefits of the boom.
In a new survey of 376 companies, the Federal Reserve Bank of Richmond found that businesses directly involved in building data centers experienced annual input-cost increases averaging 9.7%, compared with approximately 6.7% at firms with indirect involvement or no involvement. Their wages rose faster, too, as employers competed for skills and workers.
The results give a more detailed picture of the data-center economy than the familiar announcements of large investments and new facilities. The construction boom reaches far beyond technology companies, and the financial effects do not stop with a building’s completion.
Who is benefiting from the building boom?
The Richmond Fed’s Fifth District includes Virginia, the Carolinas, Maryland, the District of Columbia and most of West Virginia. The district is home to more than one-fifth of U.S. data centers, giving its businesses an unusually close view of the industry’s expansion…