2025 Industrial Construction Cost Guide

Overall ConstructionCosts Overall construction costs, not limited to industrial projects, continue to rise. Recent macroeconomic and geopolitical impacts have further driven higher costs due to increased raw material prices and preemptive price increases. According to March 2025 estimates from Engineering News Record (ENR), U.S. construction costs grew 2.1% YOY, while building costs edged higher by 1.8%. Both remain below their 10-year averages. ENR’s construction and building cost indices incorporate material prices but vary in focus. The building cost index includes skilled labor and is more applicable to structural work, while the construction cost index factors in common labor and is better suited to projects where labor represents a larger share of total expenses. Notably, skilled and common labor costs have both climbed above their respective 10-year averages.

U.S. new warehouse construction costs have remained subdued over the past two years, according to the Bureau of Labor Statistics (BLS) Producer Price Index (PPI). Robust demand for warehouses drove new construction prices up 45% from 2021 to 2022, and while recent pricing has not increased as dramatically, it remains elevated. Prices grew 0.4% YOY but were still down 0.2% from 2023 levels as softer demand in the sector has slowed the construction pipeline. Canadian new commercial building costs increased 3.9% YOY, falling short of the 10-year average increase of 4.9%. Similarly, building costs in Mexico climbed 3.2% YOY, also below the 10-year average increase of 7.1%.

Construction Cost Index

Monthly YOY Changes

25,000

18% 16% 14% 12% 10%

20,000

15,000

8% 6% 4% 2% 0%

10,000

5,000 ENR: Cost index, (1913=100, NSA)

Jan-17

Jan-21

Jan-21

Jan-15

Jan-18

Jan-19

Jan-16

Sep-21

May-21

Jan-22

Jan-22

Jan-23

May-23 Building Skilled Labor Jan-23 Sep-23

Jan-25

Jan-24

Jan-24

Jan-20

Jan-20

Sep-22

Sep-24

May-22

Sep-20

May-24

May-20

Construction Common Labor

Building Skilled Labor

Construction Common Labor

Source: Engineering News Record (ENR) (McGraw-Hill)

Source: Engineering News Record (ENR) (McGraw-Hill)

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Cushman & Wakefield