The industrial market appears to be entering a new period of construction cost escalation, as several of the same leading indicators seen during the pandemic-era construction boom are reappearing. While the underlying fundamentals are different in 2026, the pandemic demonstrated the impact sustained demand can have on construction costs, especially when lead times lengthen, supply chain bottlenecks emerge, and labor and subcontractor availability becomes constrained. Key insights into trends emerging in 2026 include:
- Demand cycle: Upward pressure coming from renewed e-commerce activity, supply chain reconfiguration, and industries tied to national security
- Shell costs: Shell costs rising 3% in 2Q 2026, the largest quarter-over-quarter increase since Q1 2022, suggesting prolonged cost pressures may persist
- Lead times: Lead times for critical materials nearly quadrupling since 2025, nearing levels last seen during peak market conditions
The following report explores these trends and what to watch over the next 12–24 months.