According to a new regional report, the data center industry delivered $126 billion in capital investment in 2021 and supported more than 28,000 jobs across Virginia.
The Northern Virginia Technology Council recently released its biennial report on the economic impact of data centers, demonstrating the exponential and sustained growth of the industry in the region.
Northern Virginia is by far the largest data center market in the world, almost double the second largest market in London. The industry is larger in area than the next five largest markets in the US combined, the report said.
Vinay Nagpal, chairman of NVTC’s Data Center Cloud Community of Interest committee, said industry growth in Northern Virginia is continuing at an “astronomical pace.”
Loudoun County continues to dominate the market regionally, with $424.7 million in local tax revenue in 2020, compared to $32.3 million in county service demand.
Prince William County is second in the region, with $64.2 million in tax revenue compared to $4.8 million in demand for local service.
“They’re both going to be strong with great prospects for staying strong,” said Stan Blackwell, board member of NVTC’s Data Center Cloud Community of Interest committee.
Fletcher Magnum, CEO of Magnum Economics, said data centers in Prince William County generate $13.50 in local tax revenue for every dollar they spend on local services.
Statewide, the industry produces more than $1 billion in local tax revenues plus $174.2 million in state taxes.
Magnum said the industry’s annual growth rate in Northern Virginia from 2014 to 2021 was 15%. The next closest market is Dallas-Fort Worth at 10%.
The report says the industry supported 5,550 direct jobs in 2021. If we take into account indirect jobs created throughout the supply chain, the industry supported 28,550 jobs. Adding construction jobs brings the total to 45,460.
“For every job within a data center, data center activity supports 4.1 jobs across the economy,” said Magnum. “Data centers in one region of the state support jobs in other regions of the state.”
By 2021, Northern Virginia data centers supported an estimated 2,300 supply chain jobs statewide.
In Prince William, residents have pushed the industry back as it has expanded beyond designated areas.
Nagpal said development is struggling to keep up with demand for more data centers and cloud storage.
Last year, the industry’s total capital investment statewide was $126 billion. If that investment were represented as one company, it would become number 22 on the Forbes 500 list between Ford and General Motors.
“Everyone understands how big a data center market in Northern Virginia is,” says Magnum. “But I don’t think people understand how big it is.”