San Francisco Bay Area: Material and labor shortages in the data center

Jun 14, 2022 | Posted by MadalineDunn

As the need for data grows and grows, demand for data center construction is as strong as ever, however, the boom is being hampered by a number of factors, including supply and labor shortages, and price hikes. In a recent report named 'Data center market conditions update - Q1, 2022,' construction consultancy firm Turton Bond's Darren Flood, author of the report, outlined that "COVID-19 variants, changing restrictions, constrained supply chains and strong demand create an unpredictable market."

Some of the main issues explored by the report included the price of steel, which has skyrocketed by just under 50% in the last 12 months. More broadly, speaking about material prices, Darren Flood, director of Turton Bond's San Francisco office, said: "The majority of materials right now are still showing that they're increasing on a quarterly basis. This is worrying too."

Another issue that may impact the construction sector is labor shortages. This complex issue is driven by a number of factors, including a lack of skilled workers, those over age 55 leaving the industry, vaccine mandates and national progression of the workforce.

According to Flood, those companies with the resources are now investing in materials they might need in the future now, to safeguard projects completion: "Early procurements, off-site warehouse storage of key equipment & locking in prices before quarterly increases is the current recipe for successful procurement in a datacenter development."