Looming fears of a global recession appear to be on hold for now, but the danger hasn’t entirely passed. Nevertheless, the data centre industry continues to outperform an otherwise fragile market. However, it isn’t yet clear whether or not this trend will persist as organisations around the world brace for hard times.
Slow and (un)steady
For now, it seems as though the risk of recession has dropped. The World Bank’s latest “Global Economic Prospects” report predicts that global growth will slow to 2.4% in 2024 before edging up to 2.7% in 2025. The odds of the US, specifically, falling into a recession are at their lowest in two years.
Researchers from Brookings point out that the slowdown last year is actually good news. “Amid wretched conditions—wars, surging inflation, and the biggest interest-rate surge in 40 years—the global economy did not suffer a significant downturn. It merely slowed,” they write. However, they acknowledge that it “would be a mistake to think the danger has passed.”
Rising geopolitical tensions, economic slowdown in China, and surging financial stress from inhospitable rental markets, energy costs, and the rising cost of living in general while wages stagnate could all tip the scales out of balance. Across multiple industries, cost containment has returned to the top of priority lists as business leaders brace for the stone that becomes a landslide.
One place where this doesn’t appear to be the case, however, is the data centre sector.
Data centres buck the trends
The data centre market is booming. According to new data from Astute Analytica, the global data centre market will reach $792.29 billion by 2032.
Cloud spending is reportedly one major driver of data centre growth in 2024. Public cloud services spending is expected to grow by 20.4% this year, due to both price increases by cloud vendors and increased utilisation as digital transformation initiatives continue to gather steam.
Cybersecurity investments are another factor driving investment, with around 80% of CIOs planning to increase their spending on cyber security this year.
Most importantly, advancements in high performance computing for AI applications, like Nvidia’s expected delivery of 100,000 AI server platforms in the current year, and expanding data centre footprints are also poised to drive significant market growth.
The explosion of AI investments, and the new pressures the technology places on data centres for computing, power, and cooling are fueling a wave of transformative shifts in data centre design, site selection, and investment strategies. With AI’s impact on the economy expected to also grow near-exponentially over the coming decade, the technology could result in the data centre sector weathering either a sluggish economy or a full blown recession.
- Infrastructure & Cloud
