Private equity investors have increasingly focused on the construction and engineering sectors amid growing demand for AI data center development, according to market data and industry analysis.
PitchBook reported that PE activity in construction and engineering reached a record 529 deals during the second quarter, representing a 56.5% increase from the prior year. While deal value declined slightly from the previous quarter, investors shifted strategy toward pursuing more numerous smaller transactions rather than larger platform acquisitions. Data center construction spending specifically rose 46% compared to a year earlier in June, while private nonresidential construction spending excluding data centers fell 7.9%, according to an Associated Builders and Contractors analysis of Census Bureau information.
Specialty trade sectors have captured the bulk of PE attention, particularly those providing essential services for data center infrastructure. HVAC contractors experienced significant activity, logging 76 PE deals valued at $3.8 billion during the first half of 2026, already exceeding the 63 deals completed throughout 2025. Electrical contractors recorded 38 transactions, surpassing the 37 completed in the prior year, while plumbing and water businesses secured 21 deals through June compared with 24 in 2025.
Industry participants noted that ancillary services supporting data center buildout—including equipment recycling, directional boring, fiber optics, and electrical engineering—represent significant investment opportunities. Contractors working on data center projects reported an average backlog of 11 months, compared with 8.5 months for those outside the sector. Market observers characterized the current phase of data center expansion as relatively early in its development trajectory.
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