Data Center Development Has Domestic Materials Manufacturers Working Overtime
Advanced manufacturing, pharmaceutical production and power infrastructure are also driving demand for construction materials, despite higher costs from tariffs
By Mark Hallum August 20, 2026 2:49 pm
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Development in the U.S. saw spotty progress in the first half of 2026 with costs of materials continuing to climb and asset classes with only the highest returns being built.
That means data centers, power infrastructure, advanced manufacturing and pharmaceutical production are taking off, while office, retail and higher education on a national level lag way behind, due, in large part, to President Donald Trump’s ongoing tariff policies, according to a Skanska report.
But just because there is a lull in some sectors does not mean supply chains for materials aren’t working at full capacity, Tom Park, vice president of national strategic supply chain at Skanska, told Commercial Observer.
“The market is hot and cold right now — hot and warm may be a better way to say it — so what stands out is that we’re seeing a lot of project activity around data centers, semiconductor, life sciences,” Park said in an interview. “There’s really a lot of unprecedented demand in the mechanical, electrical, plumbing and steel space driving up lead times and cost.”
Some factors causing these supply chain hemorrhages are Section 338 tariffs on Canada, delays on petrochemical import ships through the Strait of Hormuz, and domestic materials priced higher simply because of the supply and demand constraints.
Tariffs on steel, aluminum and copper in particular are driving prices up.
“What happens with tariffs is that it really raises the opportunity for domestic producers to raise their prices,” Park said. “For steel, aluminum and copper, the tariffs really have increased pricing on all those materials and derivative products because the foreign competition obviously has that tariff to overcome.”
Lead times for material deliveries have increased from 24 to 36 weeks to 40 to 50 weeks, indicating to Park that metal mills and fabricators are running at full capacity.
The trend is likely to continue throughout the next six to 12 months as investors put cash where it will multiply the most, possibly informed by private nonresidential construction spending increasing from 1.7 percent in 2019 to 5.4 percent in 2025, the Skanska report shows.
Life sciences development is also seeing momentum.
But Park says Skanska has no shortage of clients gauging its interest and capacity to build life sciences properties, and the global development firm is getting contracts for new projects in that submarket.
Mark Hallum can be reached at mhallum@commercialobserver.com.
