Canadian data centre and manufacturing development projects are getting a boost from the nearshoring movement, says a Turner & Townsend report.

Nearshoring is the practice of moving a business operation to a nearby country

According to the firm’s 2024 international construction market survey, Canada is seeing robust investment in manufacturing facilities and data centers as firms leverage competitive rates on land outside of major metropolitan areas.

Toronto is among markets benefitting from the trend towards large-scale data centres to meet the requirements of the increasing use of AI, due to the availability of
large amounts of affordable land nearby, outside of the metropolitan areas.

But the project pipeline is heightening concerns about Canada’s overall construction labour supply and the possibility of more insolvencies as businesses begin to feel the effects of high interest rates more acutely, according to the report.

“Developers will need to mitigate this capacity crunch in the immediate term – positioning
themselves as an attractive client to secure the right supply chain and investing in digital tools
and automation to boost efficiency,” says Turner & Townsend. “Just as important will be managing this for the long term, by bringing new talent into the industry and building the specialist skills to meet current and future needs.”

North American markets have ranked among the world’s most expensive places in which to build for the past two years, according to the report.