The Rise of AI Data Centres: What it Means for Local Construction Jobs and Labour

The Rise of AI Data Centres: What it Means for Local Construction Jobs and Labour

The rapid expansion of data centres across the UK is creating significant opportunities for the construction industry. 

Driven by growing demand for cloud computing, artificial intelligence (AI) and digital infrastructure, hyperscale data centre developments are attracting billions of pounds of investment and generating demand for thousands of construction workers. 

While the employment opportunities are considerable, what happens to the rest of the construction industry when a major data centre development arrives in an area and starts competing for labour, skills, subcontractors and materials?

In this blog, we discuss how large-scale data centre construction can have both a positive and a negative impact on local labour and construction jobs. Explaining that, although data centres can create plenty of short-term construction jobs, they can also increase competition for skilled workers in the areas in which they are being built. The biggest challenge developers face is getting the power, the people and the right technology in place.

If a data centre requires hundreds or even thousands of construction workers, where will those workers come from? Will they be recruited locally, brought in from elsewhere, or taken from existing construction projects? And could the result be increased competition for skilled workers, rising wages, higher subcontractor costs and delays to other developments?

For local construction companies, housebuilders, infrastructure contractors and recruitment businesses, understanding these potential impacts is becoming increasingly important.

Why is data centre construction growing?

Data centres are the physical infrastructure behind much of the modern digital economy. They house the servers, networking equipment and supporting systems required to store, process and distribute data.

Demand is increasing as businesses and consumers rely more heavily on cloud services, streaming, online applications and AI. The development of AI, in particular, is increasing demand for larger, more powerful facilities capable of handling significant computing workloads. This is driving investment in hyperscale data centres: large facilities designed to provide substantial computing capacity, often forming part of a much bigger campus.

The UK is an important market for this investment, with developments being proposed and delivered across several regions. While 70 data centres with an estimated build value of £2.6bn are already complete, a further 21 currently on site will cost almost double that at £4.9bn, according to Barbour ABI data.

What construction jobs are needed to build a data centre?

The rapid expansion of data centres across the UK is creating significant opportunities for the construction industry. A large data centre may be delivered in phases over several years, with different trades and specialist contractors required at different stages. 

One of the most important considerations is that data centre construction does not only simply require large numbers of general construction workers; these facilities have particularly intensive requirements for electrical, mechanical and specialist engineering work, so a wide range of data centre jobs are required. This means their impact on the construction workforce may be different from that of a conventional office building, warehouse or residential development.

The workforce may include:

The workforce requirements of a data centre depend on its size, design, construction programme and the number of buildings being developed. What also needs to be considered is the number of workers that are required at any one time, the number of both direct and indirect jobs that will be supported, along with the permanent workforce required once the facility becomes operational.

How can data centre construction affect local labour markets?

There will be both positive and negative effects on local labour markets that need to be considered.

The positive impact on local construction jobs

• Boost to local construction employment and demand for skilled workers

Building a new data centre can provide a significant boost to local construction employment, creating huge demand for construction workers and skilled trades, specialist contractors, engineers and construction professionals. The benefits can extend well beyond the construction site itself, supporting local businesses, supply chains and employment opportunities for people living in the surrounding area.

For the UK construction industry, data centres are particularly important because they require a combination of traditional building skills and specialist electrical, mechanical and cooling expertise.

• Training and apprenticeship opportunities

New data centre projects can encourage contractors to invest in training and develop the next generation of construction workers. This is particularly valuable in areas where younger people may have limited access to large-scale infrastructure projects. For local employers, developing these skills can also help address future recruitment challenges by creating a larger pool of qualified workers.

• Higher earning potential for in-demand skills

Large data centre projects can intensify competition for workers, particularly in specialist disciplines such as electrical installation, mechanical services, commissioning and project management. Where demand exceeds the available supply of qualified workers, contractors may need to offer more competitive salaries, day rates or benefits to attract and retain people.

Potential benefits include:

• Better-paid opportunities for experienced specialists
• More contract work for self-employed tradespeople
• Greater demand for workers with specialist qualifications
• Opportunities to progress into supervisory and management roles

Higher pay is not guaranteed, however. It depends on local labour supply, project timing, contractual arrangements and wider construction market conditions.

• Boost to wider local community

The economic benefits can spread beyond the construction site as workers spend money at local amenities and accommodation. Contractors may also purchase materials, equipment, transport and support services from businesses in the surrounding area.

• A long-term pipeline of construction work

One of the most significant potential benefits is that data centre development can generate work beyond a single building project. A large centre may be developed in phases, with separate buildings, additional power infrastructure and further cooling capacity installed over several years. This can provide contractors with opportunities to secure repeat work and plan recruitment more confidently.

The benefits could be particularly significant in regions attracting new data centre investment, including the Thames Valley, Hertfordshire, Essex, Greater Manchester, Yorkshire, South Wales and parts of the North East. For example, the development in Cambois in the North East of England, which is currently underway, is estimated to create 1200 jobs in construction and 400 operational jobs, along with up to 2700 indirect jobs, and the proposed development in the Scottish Borders will create around 1000 jobs during its construction.

The challenges for local construction labour

Although data centre construction can create jobs, support local businesses and bring investment into an area, it also presents challenges. Large developments can put pressure on local infrastructure, increase demand for skilled workers and create disruption for nearby communities. For the UK construction industry, the projects themselves can be technically demanding, with tight deadlines, complex installations and a heavy reliance on specialist contractors.

Understanding these challenges is important when assessing the overall impact of data centre development on local employment and the communities where projects are built.

• More competition and pressure on the local construction workforce

Data centres require a substantial workforce and if several projects are being built in the same region, contractors may compete for workers which can create challenges for both the data centre developers and other construction employers, such as:

• Difficulty recruiting suitably qualified workers
• Increased labour costs for contractors
• Workers moving from other local projects to data centre contracts
• Delays where specialist workers are unavailable

• Added pressure/skills shortages

The construction industry already faces recruitment challenges in some specialist trades with skills shortages. Data centres can add to demand for specialist skills, creating issues for employers who need workers with the right qualifications and experience at specific project stages. Training takes time, so it may not solve immediate recruitment gaps. Contractors must often plan their workforce requirements well in advance, particularly when several projects are competing for the same talent.

• Disruption amongst local communities

Building a data centre can involve extensive groundworks, excavation, structural construction and deliveries of heavy equipment. Depending on the site's location and size, this can cause disruption for people living and working nearby and affect the local infrastructure.

Potential issues include increased construction traffic, noise pollution, dust and vibration issues, road closures and diversions, pressure on local transport networks and the visual impact from large buildings and construction activity. Furthermore, staff shortages may also delay project timelines, causing upset amongst local residents who are living near unfinished projects.

Can data centre developments increase construction costs?

Data centre developments can increase construction costs in the UK, particularly in areas where several large projects are being built at the same time. They can create additional competition for skilled labour, specialist contractors, construction materials, equipment and available power infrastructure:

• Increased competition for skilled labour can lead to higher wages and day rates for in demand trades
• Increased agency and recruitment costs
• Higher subcontractor prices
• Delays whilst contractors source workers
• Higher equipment and material purchase prices
• Increased delivery costs and storage prices
• Delays caused by unavailable materials 
• Knock on effects on other local construction projects

However, the impact is not uniform. A data centre development and the data centre construction costs will not necessarily impact and make every construction project more expensive. The effect depends on the scale of the development, its location, the timing of construction and how much it competes with other projects for the same resources.

What could data centre investment mean for construction jobs in the North East?

The North East is becoming an increasingly important region for UK construction, with major investment in data centres, energy infrastructure, manufacturing, housing and urban regeneration. Construction activity is being driven by major infrastructure projects, and housing construction is showing signs of growth – there has been an increase of 24% this year to June compared to last year.

One of the most significant examples of data centre investment in the North East is the QTS development at Cambois, near Blyth. The project involves redeveloping the former power station site to create a major data centre campus, with plans for up to ten buildings and an investment of up to £10 billion. It’s estimated that around 1200 construction jobs will be created during the development and around 400 operational jobs will be generated once the centre is fully operational. An additional 2700 indirect jobs are likely to be created across the development.

This new development could give local contractors access to larger projects, create opportunities for specialist trades and encourage investment in construction training. The Cambois campus is particularly significant because its phased development could sustain demand for construction workers over several years. The most relevant occupations include:

• Civil Engineers, Groundworkers and Plant Operators
• Electricians and high-voltage specialists
• Mechanical and HVAC Engineers
• Steelworkers and building-services installers
• Construction and Project Managers
• Commissioning Engineers and Health and Safety professionals

There are also two other proposed data centres in the North East; West Sleekburn Data Centre and Wilton International Data Centre.

How can construction employers prepare for increased data centre demand?

As data centre investment grows across the UK, construction employers have an opportunity to secure new contracts, expand their workforce and develop specialist expertise. However, success will depend on how well businesses prepare for the technical demands, recruitment challenges and tight delivery schedules associated with these projects.

For employers, preparing for this demand means looking at more than just recruiting more workers. Employers will need to:

• Identify which skills are in most demand
• Start recruiting ahead of time and before demand peaks – this could include building a pipeline of qualified candidates, maintaining and developing relationships with specialist construction recruitment agencies, identifying where workers could be upskilled and developing strong relationships with subcontractors even before tenders are awarded
• Plan budgets around labour costs and specialist equipment and materials
• Strengthen supply chains
• Invest in training and apprenticeships
• Constant monitoring of project dates 

Ultimately, preparation is about recruiting the additional people, but it’s also about having the right skills, equipment, partnerships and workforce capacity available at the right time.

Data centres can create a substantial, though largely temporary, increase in construction employment, with additional benefits for local subcontractors, skills development and the wider supply chain. Data centre construction offers the UK construction industry considerable opportunities, from increased demand for skilled trades and specialist engineers to new contracts for local businesses. The most successful developments will be those that combine effective project delivery with responsible community engagement, investment in workforce training and realistic planning for infrastructure requirements.

For construction professionals, the growth of data centres could provide a valuable route into specialist infrastructure work. For local communities, the key question is whether developments can deliver meaningful employment and economic benefits while managing disruption and environmental pressures. Ultimately, the long-term value of data centre construction depends not just on how much investment a project attracts, but on how effectively that investment benefits local workers, businesses and communities.

How Linear Recruitment can help you elevate your career

Linear Recruitment has been a specialist construction recruiter for over 25 years and takes pride in the working relationships we have formed. Our vision is to be the recruiter of choice, and we’re achieving our vision by delivering the highest quality of service, responding to the needs of our clients. We’re hardworking and passionate, our actions speak for us and we operate in a direct and straightforward way. 

Linear Recruitment works with a wide range of construction and construction-related organisations. We support national and regional house builders and social housing contractors, Tier 1 and Tier 2 construction and civil contractors, as well as a wide range of subcontractor businesses.  Our services include the supply of temporary and permanent blue-collar workers up to senior appointments and we also have the capability to support large-scale, project-specific large-scale project specific recruitment campaigns.

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