Industrial construction costs are rising across the Americas as improving demand and a recovering development pipeline create renewed competition for materials and skilled labor, according to Cushman & Wakefield’s 2026 Industrial Construction Cost Guide.

The report found that construction costs increased across all three project sizes tracked. Small industrial projects rose an average of 3.6% year-over-year to $144 per sf. Medium projects increased 2.8% to $87 per sf, while large projects rose 2.3% to $78 per sf.

The 2026 guide analyzes industrial construction costs across 46 markets in the Americas and reflects ground-up core and shell construction for modern distribution facilities. The cost increases came as broader industrial market fundamentals began to improve.

The research shows the Americas construction pipeline reached about 389 million sf as of mid-2026, its highest level since the first quarter of 2024.

In the U.S., construction activity increased for four consecutive quarters to 305 million sf, up 18% year-over-year, as stronger leasing and stabilizing vacancy helped restore developer confidence.

Demand has also strengthened, as U.S. net absorption exceeded 110 million sf through the second quarter of 2026, the strongest first-half performance since 2023. New leasing volume reached its highest level since mid-2022.