A recent Intuit survey spotlights the top challenges within the construction industry: skilled labor shortages, rising material costs, and growing operational inefficiencies. For anyone paying attention, none of this comes as a shock.
The construction sector has notoriously suffered from inefficiencies across workflows. By nature, most of the job is done anywhere but a desk, and with that comes challenges of its own. Manual takeoffs, disconnected spreadsheets and using outdated estimating processes (including for some, the decades-old pencil and paper method) continues to quietly drain time, labor, and margins in preconstruction.
CEO of STACK Construction Technologies.
But with the recent data center boom, these inefficiencies are more than just time sucks. They are getting in the way of key infrastructure being executed. Fueled by AI adoption, increased demand, and unprecedented investment from some of the largest technology companies, data centers are expected to grow at double-digit annual rates for the rest of the decade, according to a recent Deloitte report.
This extreme spike is pressuring the construction industry to rethink its traditional resistance to digital transformation, specifically in the preconstruction phase as build demand increases exponentially.
People talk about digital transformation like it’s as simple as adding an app or new software, but the industry needs to shift its decades-old thinking around how projects are managed from start to finish. The intersection of data, automation, and cloud platforms connect every phase of a project, from design to estimating to procurement to ultimately, executing the build.
Data centers are a guiding light for construction workers grappling with project uncertainty and rising material costs, yet the labor shortage remains a major roadblock to fulfilling these infrastructure demands. This pressure is forcing developers to abandon or pause twice as many private projects as they did last year. It is clear workers need assistance urgently and will have to look to AI tools as a helping hand.
Data Centers are the reimagined ‘smart buildings’ of 2026
Similar to the boom of manufacturing facilities or the demand for ‘smarter’ connected buildings in the 2010s, data centers present a massive opportunity for contractors. The manufacturing facilities boom, for example, was driven by federal funding from the Infrastructure Investment and Jobs Act (IIJA), Inflation Reduction Act (IRA), and CHIPS Act.
Data center growth is instead being driven by corporations’ own investments, with companies like Amazon Web Services (AWS), Microsoft and Meta investing hundreds of billions of dollars directly to expand – and fast. U.S. data centers are expected to grow at a CAGR of 10-11% through the next decade, as companies race to digitize nearly everything around us. These structures serve as the backbone of nearly everything we do online, housing critical infrastructure for cloud computing, AI searches and more.
The issue at the top of the list in meeting this demand – where to find the labor? According to ABC (Associated Builders and Contractors), the construction industry needs to attract an estimated 349,000 new workers in 2026 to meet demand for construction services. (And next year, an additional 456,000 new workers will be needed to meet the demand!)
Read any article and the dominant narrative is that AI is taking our jobs. In reality, digital transformation and implementing tools like AI-accelerated workflow automation is not replacing people; it’s making the current human workforce more efficient and able to keep up with the demand.
How to perform an accurate takeoff
Seems simple, right? But the scariest moment for a contractor is when they win a bid. Contractors still using antiquated manual methods or outdated desktop software leave an incredibly high room for error. Accurate bids begin with precise measurements, and precise measurements require technology. Especially when entering new industries with unfamiliar pricing structures, materials, or labor needs – precise measurement will ensure you can provide accurate estimates by summarizing projects by square foot, projected profit, and project detail.
When contractors adopt a digital-first mindset, the traditional top-down funnel shifts with them. It used to be that the architect would stamp APPROVED and pass off to the on-site construction team to build. Very transactional, and oftentimes mismatched. Once you start nailing two-by-fours on-site, design and practicality are often misaligned. The ability to share updates through native AI framework, leveraging the construction team on the ground as a data point to adjust the blueprint creates a more circular process.
As data center construction accelerates, the most critical piece of the process will always be the preconstruction phase. The importance of this phase is wildly underestimated, relying on efficient takeoffs, detailed estimates, and current pricing information where accuracy is key. Contractors need technology that helps them interpret the complex drawings to correctly estimate quantities down to the exact number of nails needed. The shift to digital tools on the job site will ultimately protect margins and further accelerate demand.
This isn’t about chasing the latest technology trend. This is about ditching a method that will ultimately harm the industry as it moves forward, by creating more accurate workflows through the adoption of new technology tools. The data center boom won’t wait for the industry to catch up, but contractors who invest in preconstruction technology won’t have to.
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