The UK construction market for data centres is estimated to be valued at around £1.1bn in 2017, following two years of market growth.
Performance has been positive in recent years, with high take up of space in the co-location sector from late 2015 onwards. In 2016 and 2017, the data centre market benefitted from major investment decisions from Amazon Web Services, Microsoft, IBM and Google. There are also several other major data centres being developed across the UK, which should provide further impetus to the market in the next year or two.
The commercial sector has experienced the greatest level of growth, boosted by data investments from global players in the last two years. While growth in the commercial sector has outpaced the private data centre sector, most of the existing data centre estate still belongs to private businesses.
In contrast, expenditure in the public sector has marginally fallen, as the Government’s cloud-first policy has led to increased outsourcing of wholesale and co-location providers to reduce its IT expenditure.
A key driving force for construction has been the rapid growth in demand for data storage. Consumers’ demand for digital content continues to grow, particularly due to increasing levels of online use. In addition to this, ongoing growth in mobile data usage is fuelling demand. Greater levels of online usage have also led to increasing amounts of data being processed over networks.
Market Research Manager at AMA Research, Hayley Thornley, said: “Indications are that construction output within the data centre sector will rise consistently from 2018 onwards, driven by steady overall construction output, but primarily by underlying factors driving greater IT and internet usage. The commercial sector is expected to drive construction growth, while the trend towards outsourcing data centre services from both the public sector and private businesses is likely to lead to relatively modest growth in these sectors.”
Overall, the data centre construction market is forecast to grow by around 3-4% per year through to 2022.