DatacenterHawk Releases Q1 2023 Data Center Absorption Report

DatacenterHawk's Q1 2023 review found North American data center absorption at its lowest since Q3 2021. Despite this, worldwide industry demand remains high. DatacenterHawk president David Liggitt expects an interesting year of data center development. Market analysis will help stakeholders manage power shortages, supply chain concerns, and growing costs while data center infrastructure demand remains high. After record levels in 2020-22, US data center development has slowed as LATAM demand has surged, according to market research. According to the report, power constraints, supply chain concerns, and growing costs have created fresh possibilities in emerging economies to capture demand that supply-constrained primary markets cannot provide.

Following a busy 2020-22, North America has cooled. North America had multiple record-setting absorption periods in those two years, but this has slowed. The lowest absorption in North America since Q3 2021 (436MW) occurred in Q1 2023. DatacenterHawk says Latin America is experiencing a "surge in growth." According to the expert, the country has seen a tremendous increase in technology adoption, and pre-pandemic digital infrastructure in Dallas, Miami, and Los Angeles is no longer sufficient. Many European countries are transitioning to new data sovereignty, privacy, and security rules, which have lowered absorption to its lowest level since Q4 2021. Power availability seems to dominate site selection. Also, DatacenterHawk noted significant advances in Singapore and Hong Kong due to economies and interconnectivity (of these sectors) creating sufficient demand for data center infrastructure.