US data centre boom lifts North American equipment sales

Construction equipment revenues for OEMs in North America are rising sharply, according to Interact Analysis, with the market intelligence firm attributing the increase mainly to US data centre construction.

That revenue growth comes despite broader weakness across much of the construction market. Housing remains under pressure, while several non-residential segments are flat or declining. Interact Analysis said strength in data centre-related work is masking softer demand elsewhere that would otherwise be more visible in manufacturers' results.

Revenue versus demand

The research highlights a gap between headline revenue growth and underlying unit demand. Equipment makers are reporting higher sales values, but that is not always matched by similar growth in the number of machines sold, particularly in compact equipment.

Caterpillar is one of the clearest examples of the trend, with construction revenue reported up 50% in the second quarter of 2026 from a year earlier. The wider market has also seen year-on-year growth accelerate over the past three quarters.

That increase has been linked to heavy capital spending on artificial intelligence infrastructure. New data centre developments require significant earthmoving, utility connections and site preparation, supporting demand for larger categories of construction machinery.

Even so, the study argues that the wider North American market remains uneven. Non-residential construction has been declining for more than a year, and the downturn would have appeared earlier without support from data centre projects. Factory and warehouse construction were singled out as two large segments that are either sluggish or already falling.

The residential market also remains weak. High interest rates and housing affordability pressures have held back activity. New housing starts have been stalled for the past six months, while housing inventory has risen again.

Mixed manufacturer signals

Recent outlooks from major manufacturers also suggest revenue growth is being driven by pricing and product mix rather than volume alone. John Deere is targeting construction equipment unit growth of about 5% in the US and Canada in 2026, while also expecting margin expansion from price increases and a shift towards higher-margin products.

The same review said John Deere sees rental fleet demand, data centre work and infrastructure projects as key sources of support, but noted that production openings are still not full. That suggests the current rise in revenue has not translated into uniformly tight factory schedules.

For Caterpillar, dealer inventories are increasing, indicating that some sales growth is moving into channels rather than directly to end users. Interact Analysis also cited Caterpillar's reported price-neutral unit growth of 12% in the first quarter of 2026 and 27% in the second quarter, alongside a full-year target for the wider business to increase by the mid-to-high teens.

Volvo Construction Equipment was described as having North American units up 5% year to date, with a full-year target of 0% to 10%. Hitachi Machinery was cited as forecasting early 2026 North American demand growth of 10% for excavators, 2% for mini excavators and 4% for wheel loaders.

Taken together, those figures point to an industry where growth is concentrated rather than broad-based. Sales linked to data centre development are lifting results, but momentum varies by manufacturer and machine type.

Outlook risks

Interact Analysis expects North American construction equipment sales and production to return to positive growth in 2026, 2027 and 2028 after a difficult period in 2024 and 2025. Yet it also warned that reliance on data centre construction creates a clear risk if investment in artificial intelligence infrastructure slows.

The firm said investor confidence in AI-related businesses could become an early indicator for the machinery market. If major AI companies struggle to turn subscriber growth into positive cash flow after large public market listings, that could curb capital spending and slow the pace of data centre development.

Alastair Hayfield, Vice President of Research at Interact Analysis, said the market requires close monitoring because strong revenue numbers do not fully reflect underlying construction demand.

"The reality is that the surge in data center construction is masking a weak housing market and a non-residential construction market that is declining in many sectors," said Hayfield.

He also stressed the importance of tracking whether other construction categories can recover strongly enough to offset any cooling in AI-related spending.

"At the same time, watching for growth opportunities in other construction markets, such as manufacturing or warehousing, is going to allow OEMs to maintain growth in the longer term," said Hayfield.