The cost of constructing a data centre in the UK could continue to rise by up to 6.8% if oil prices remain elevated, according to new research from Currie & Brown. 

The latest analysis comes after an agreement was signed between the US and Iran, with the expectation that there will continue to be volatility in prices even if the deal eases immediate concerns over energy supplies. 

In the UK, Currie & Brown forecasts that steel prices could increase by up to 9.1% by September under a higher oil price scenario. Copper could rise by 5.5%, while aluminium could increase by as much as 12.4%.

Nick Gray, Chief Operating Officer, UK and Europe at Currie & Brown, commented, “A peace agreement between the US and Iran may have been reached, but the impact on construction will not disappear overnight. In the UK, we expect the cost of key materials to remain elevated for some time, as higher oil prices continue to feed through supply chains and manufacturing costs.

“For project owners and investors, the challenge is understanding the risks early and building resilience into delivery plans.”

Data centres face a particular squeeze

The findings come at a time when data centre developers are already grappling with grid constraints, long equipment lead times and continued demand for capacity driven by AI and cloud growth.

Higher material costs could add another layer of complexity, particularly for projects where speed to market is critical. Developers may need to look again at procurement strategies, lead times and programme certainty if cost pressures persist.

The impact will not be limited to the UK. Currie & Brown’s global analysis suggests that oil price volatility will affect construction markets differently depending on local demand, import reliance and procurement practices.

For example, in India, steel prices could rise by up to 18%, driven by strong domestic demand and reliance on imports. Singapore, by contrast, could see steel costs increase by 4.3%, partly because some major projects have already secured materials through early procurement.

Alan Manuel, Group Chief Executive Officer at Currie & Brown, said: “Construction projects don’t stop every time markets become volatile. Investment decisions still need to be made, contracts still need to be signed, and programmes still need to move forward.

“Events like this are becoming a more regular feature of the operating environment. Whether it is geopolitics, inflation, trade policy or supply chain disruption, market conditions frequently change quickly and often with little warning.

“The organisations best placed to succeed are not those trying to predict every disruption. They are the ones taking the time to understand the risks and build flexibility into their plans and delivery models from the outset.”

While the US-Iran agreement may have reduced some immediate pressure on energy markets, Currie & Brown’s research suggests construction leaders are unlikely to get complete certainty any time soon.