Key facts
- The Dodge Momentum Index for commercial project planning fell 6.9% in June, driven by a dip in data center projects.
- Construction spending on data centers exceeded $50 billion for the first time in April.
- Several large data center projects have been canceled or rejected in Virginia and North Carolina.
- Numerous local governments are considering bans on new digital infrastructure projects.
Despite a surge in demand for artificial intelligence capacity, the development pipeline for data centers is showing signs of deceleration. The Dodge Momentum Index, which tracks commercial project filings, saw a 1.9% overall decline in June, largely due to a 6.9% drop in data center project planning.
While data center construction remains at record levels and significantly contributes to overall U.S. construction growth, the pace has moderated. In the first quarter, construction in the sector for the top four U.S. markets increased by 33%, and construction spending on data centers surpassed $50 billion for the first time in April.
However, headwinds are emerging. In Prince William County, Virginia, Compass Datacenters and Blackstone's QTS each withdrew multibillion-dollar projects following local opposition. The county also rejected a third proposed data center project. Similarly, Energy Storage Solutions withdrew plans for a nearly $20 billion project in Edgecombe County, North Carolina.
These localized challenges are contributing to a broader trend, with at least 14 states and numerous municipalities considering bans on digital infrastructure projects, potentially shrinking the available locations for future development.