A new Turner & Townsend report highlights how soaring demand for data centres is stretching construction capacity and intensifying skilled labour shortages. At the same time, Africa’s expanding cities are driving residential and social-housing growth, while infrastructure demands and constrained resources contribute to rising costs across the continent’s built environment.
Now in its 17th year, Turner & Townsend’s Global Construction Market Intelligence report represents the definitive analysis of the global construction industry, with data gathered from 112 markets across 44 countries.
Key findings from the report include:
The growth in demand for AI infrastructure, particularly in South Africa, is raising the likelihood of a severe shortfall in the skilled labour required to build data centres, and further fuels calls for increased training and more concentrated efforts to recruit the workforce needed to keep up with future demand.
Globally, skills deficits are particularly acute in the specialist mechanical, electrical and plumbing trades, with 87% of markets reporting MEP trade shortages, which are essential in tech-centred projects. Similarly, the pace of growth in AI has resulted in data centres becoming the most constrained sector globally when it comes to contractor capacity.
Despite ranking towards the bottom of global cost rankings, Africa is expected to experience significant local-currency cost inflation in the coming years. Lagos is forecast to see inflation of 18% in 2026 and 16% in 2027, while Harare is expected to rise from 10% to 15% over the same period. Conversely, cost inflation will be more stable year-on-year in Cape Town, Johannesburg, and Nairobi.
Africa is less integrated than some regions into global industrial supply chains, and this has helped to soften the impact of the conflict in the Middle East. On top of that, rising global oil and gas prices are also making African energy investment itself increasingly attractive, with an abundance of liquified natural gas in Mozambique and Namibia driving demand and pushing up costs.
African markets have invested heavily in the renewable energy sector, especially solar, wind and nuclear power. However, power availability for new projects is still constrained by slow approvals and transmission-line delivery. Planning hold-ups play into this, with delayed approvals, resulting from complex regulatory frameworks across jurisdictions, having a high impact on project delivery.
Wendy Cerruti, director and real-estate lead for Africa at Turner & Townsend, said: “The global construction market is shifting and new dynamics are reshaping the key drivers of cost performance. Demand is increasingly uneven and concentrated, including on AI-driven sectors like data centres. This comes as shortages in key skillsets, supply-chain volatility and geopolitical risk are becoming more pronounced.
“There is a very real risk that growth in the pool of skilled labour needed to build data centres won’t keep up with demand, including in Africa. In construction, AI has the potential to be a force for good in terms of driving demand for skilled roles, but only if the right resources are put in place to support it and the right incentives are established to attract new labour. Africa has demonstrated its resilience in the face of energy independence pressures over the last few decades.
"The impact of the conflict in the Middle East on energy prices will be indirect and uneven, varying by geography and sector depending on supply-chain structures and energy dependence. However, we expect investment in diversified energy sources to continue across the continent."
“Unlike other markets globally, on the back of pronounced urbanisation traditional sectors like residential and social housing and office development continue to lead the way in Africa, although data centres are becoming an increasing area of growth, particularly in the likes of Johannesburg and Lagos. Those trends will bring their own pressures, with labour shortages and stretched infrastructure likely to be key challenges.
“Clients with global portfolios must use this opportunity to review international programmes to ensure the right projects are prioritised based on local conditions. Decisions should consider not only relative cost, but also interest rates, labour availability and digital maturity in the supply chain.”
