Industrial construction costs increased 2.6% year-over-year in March, marking a deceleration in the pace of increase that was at double digits 2 years ago thanks to supply chain constraints and inflationary pressures. However, high inflation, rising land prices and a tight labor market could cause construction costs to climb.

Pricing for small projects averaged $142 per square foot, up 17 percent from last year, while medium-sized projects averaged $85 per square foot, up 2.1 percent year over year, according to Cushman & Wakefield's latest industrial cost guide. Pricing for large projects receded slightly to $75 per square foot, down 4.2 percent from last year. Miami was one of the priciest markets for industrial construction in the United States while Dallas and Houston were among the most cost-effective, according to Cushman & Wakefield.

Commodity prices continue to moderate this year, with lumber prices falling 1.4%, steel prices falling 8.4% and copper prices falling 2.9% year over year. Concrete prices rose 7.4% primarily due to plant closures in Mexico, the report said. Prices for all four commodities edged slightly higher month to month, although most increases are within the 10-year average. Cushman & Wakefield forecasts modest increases in commodity pricing through the end of the year.