Data center development in construction sector

PARAGRAPH 1 --- What happened: Data center construction planning cooled in June, with a significant drop from extraordinary levels at the start of summer. Despite this, demand remains robust, as seen in Limbach Holdings' (LMB) modular construction solutions for data centers and Sentia ASA's (SNTIA.OL) NOK 320 million contract for OSL1 Phase 2 data center. Meanwhile, skilled labor shortages persist, with electricians and HVAC technicians prioritizing data center jobs over residential renovations. New York passed a one-year data center permit moratorium, while Cardinal Infrastructure (CDNL) secured a $24 million initial contract for a data center campus development.

PARAGRAPH 2 --- Market impact: The data center construction sector is experiencing a labor crunch, driving up wages and potentially increasing project costs. The New York moratorium may temporarily slow data center development in the state but is unlikely to significantly impact the broader market. Companies like Limbach and Sentia are benefiting from increased demand and are well-positioned to capture market share as data center development continues. Tech companies focused on data centers, such as CoreWeave and Nebius Group, may see indirect benefits from increased construction activity.

PARAGRAPH 3 --- What to watch next: In Q2 2026 earnings, monitor Limbach and Sentia's data center-related revenues and backlogs for signs of sustained demand. Keep an eye on New York's data center permit moratorium's expiration in June 2027 and any potential extensions or changes. Lastly, watch for updates on Turner Construction's data center projects, as their progress serves as a leading indicator for the sector's overall health.