The Advanced Manufacturing and Mission Critical sectors in the U.S. are both undergoing a construction surge, driven by growing demand for technological innovation, data infrastructure, and operational resilience.

Advanced Manufacturing is expanding as industries like semiconductors, automotive, and energy scale up to meet the demand for domestically produced high-tech products. Meanwhile, the Mission Critical sector, encompassing data centers and cloud services, continues to grow alongside the rising need for digital infrastructure.

Despite challenges such as power availability constraints, a shortage of skilled labor, slower consumer adoption of EVs, and construction cost increases (which have started to stabilize), larger projects in both sectors remain viable. Both industries continue to attract substantial government funding and private capital, indicating sustained momentum over the coming years.

Although the Advanced Manufacturing market has slowed compared to the rapid growth of 2023, its overall health remains strong. Key factors, such as sustained capital investments from both private and public sectors and robust long-term product demand, continue to drive the market. A gradual decline in interest rates is expected to further support growth by easing capital market conditions.

Sectors like semiconductors and energy are transforming rapidly to meet rising demand for smart products and greener technologies. Aerospace is also experiencing significant growth, though it’s often overshadowed by the record-breaking expansion in other industries. In contrast, the automotive sector has seen a slowdown in electric vehicle (EV) adoption and battery development, leading some companies to shift toward hybrids or delay plans. However, the overall trend toward electrification and technological innovation in vehicles persists, with increasing demand for electrical components, chips, and infrastructure to support advanced safety, automation, and entertainment features.

The industry also faces challenges, particularly in terms of skilled labor shortages for both construction and operations. Large manufacturing projects often compete for land and utilities with medium-to-large mission-critical projects. Depending on the location, these projects either benefit from or are hindered by the availability of a skilled post-construction workforce.

In-depth knowledge of specific manufacturing techniques, along with expertise in construction methods and supply chains, is crucial for executing increasingly complex projects. These often involve federal funding requirements, remote locations, integration of overseas suppliers, and other logistical challenges.

The mission critical, or digital infrastructure, industry is experiencing significant market growth, driven by the rapid expansion of data centers, cloud computing, and increased reliance on digital infrastructure across sectors like healthcare, finance, and telecommunications. As businesses place a high priority on uptime, security, and reliability, demand for data centers has surged.

This growth is further fueled by advancements in technologies such as artificial intelligence, edge computing, and 5G, all of which require secure, resilient environments. However, the industry faces challenges, including power and cooling constraints, rising construction costs, and shortages of skilled labor, which can impact project timelines and efficiency. Despite these obstacles, the long-term outlook remains positive as industries continue to invest in mission critical infrastructure to meet growing digital demands and ensure operational continuity.

It is an exciting time to be in the data center business, with demand surging globally. Suppliers of land, capital, and infrastructure are racing to meet this unprecedented growth. However, the industry also faces tempered realities such as power availability, equipment delays, municipal rejections, and labor shortages. We believe these challenges will help moderate growth as industries adapt to managing and monetizing the full capabilities of AI and other emerging technologies.

Photo: Danny Sandler