The latest report from Turner & Townsend highlights the significant impact of AI infrastructure growth on Asia’s construction market, revealing a surge in demand for data centres that is straining market capacity and exacerbating skilled labour shortages. The Global Construction Market Intelligence report, now in its 17th year, indicates that 16 out of 29 Asian markets are experiencing “hot” or “overheating” activity, driven by investments in data centres, advanced manufacturing, and logistics.
Key findings show that residential and social housing remain Asia’s top-performing sectors, followed by data centres and industrial logistics. Tokyo leads as the most expensive construction market in Asia, with costs reaching $5,801.2 per square metre, largely due to its burgeoning data centre sector. Other Japanese cities like Osaka and Sapporo also rank high in construction costs.
The report warns of a severe shortfall in skilled labour, particularly in mechanical, electrical, and plumbing trades, crucial for tech-centred projects. Sumit Mukherjee, Managing Director for Real Estate for Asia at Turner & Townsend, emphasised the uneven demand concentrated on AI-driven sectors, stating, “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.”
The report also notes that geopolitical uncertainties are creating opportunities in manufacturing-led construction, with nearshoring driving growth. In India, cities like Mumbai are set to experience significant inflationary pressures due to rising demand for transport infrastructure and commercial space.
As the construction market in Asia braces for further growth, the report underscores the need for strategic planning to address labour shortages and inflationary pressures.
