Texas is experiencing a significant surge in industrial development, with construction activity reaching record highs in the second quarter of 2025. According to CBRE, 47.8 million square feet of industrial space is currently under construction statewide, an increase of more than 10 million square feet from the previous quarter. Houston leads the expansion with 17.8 million square feet underway, followed closely by Dallas with 15.4 million square feet. The projects include a mix of warehouses, logistics centers, and large-scale industrial facilities, reflecting strong investor and developer confidence.

In Houston, developers are rapidly advancing new projects, reinforcing the city’s position as one of the most active industrial markets in the country. Leasing remains robust, with Colliers reporting 7.7 million square feet leased in the second quarter alone and construction activity up 84% year-over-year. Major corporations, including Foxconn, are investing heavily in the region, signaling continued market confidence and long-term growth potential.

Industrial expansion is also accelerating across other Texas metros such as San Marcos, Terrell, Irving, Grand Prairie, Socorro, and Mesquite. With Houston and Dallas driving much of the momentum, Texas has emerged as one of the most active industrial construction markets in the United States. The boom is fueled by e-commerce growth, population increases, and ongoing corporate relocations, positioning the state for sustained industrial strength through 2026.

Reference: https://www.constructionowners.com/news/texas-sees-industrial-construction-surge

Texas is undergoing an unprecedented wave of industrial construction, driven by a strong energy sector, federal incentives, and surging demand for high-tech and energy infrastructure. Federal programs such as the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and the CHIPS and Science Act have supercharged investment in semiconductor manufacturing, clean energy, and large-scale infrastructure projects. At the same time, advances in artificial intelligence, data processing, and cloud services have created significant demand for new data centers, which in turn rely heavily on Texas’ growing supply of electricity from natural gas, wind, and solar sources.

Semiconductor and high-tech manufacturing projects are leading the way. Construction contracts in Texas jumped from just $17 million between 2017 and 2019 to $15 billion in 2023, nearly 24 percent of all U.S. semiconductor construction. Major initiatives include Texas Instruments’ $30 billion multi-plant expansion in Sherman, GlobalWafers’ new $3.2 million-square-foot facility, and Samsung’s $17 billion plant in Taylor, with additional projects worth more than $40 billion in planning. Data center development is also surging, with construction rising from $870 million in 2017 to $6.8 billion in 2023. Texas captured 10 percent of national data center contracts thanks to its ample land, favorable regulations, relatively low-cost electricity, and established high-tech workforce.

Energy and petrochemical projects continue to anchor the boom. Houston was designated a federal hydrogen hub, attracting more than $1 billion in funding, while abundant natural gas continues to fuel new LNG facilities and petrochemical expansions such as OxyChem’s $1.1 billion plant addition in La Porte. These investments reinforce Texas’ role as both a low- and high-carbon energy leader. Supporting this growth, industrial construction wages in Texas reached nearly $48 per hour in 2023, almost 40 percent higher than the statewide average, reflecting strong demand for skilled labor.

Since mid-2022, Texas has attracted $289 billion in new construction contracts, representing 16.5 percent of the national total, with $165 billion in private projects announced and $78 billion of that dedicated to semiconductors. While challenges remain—including labor shortages, supply chain pressures, and uncertainty over future federal funding under the Trump administration—the scale of development already underway is historic. With its unique combination of energy resources, skilled workforce, and strategic location, Texas has firmly established itself as the epicenter of America’s post-pandemic industrial construction boom.

Reference: https://www.dallasfed.org/research/swe/2025/swe2501

Houston’s industrial market is booming, fueled by large-scale investments and significant leasing activity. In the third quarter of 2024, the city saw nearly 6.2 million square feet of net absorption, raising the year-to-date total leased space to 16.3 million square feet—a four percent increase over last year. New supply is also growing, with 3.3 million square feet delivered this quarter and major developments underway, especially in the southeast and southwest submarkets. Notable projects include Palmer Logistics’ new 616,700-square-foot facility in Baytown, Trammell Crow’s 1.35 million-square-foot Blue Ridge Commerce Center in Fort Bend County, and Liberty Development Partners’ expansion of Gulf Inland Logistics Park to nearly 4,000 acres.

Additionally, major firms like Prologis, Partner Capital, and Avera Companies are planning millions of square feet in new space near key transport hubs like the Houston Ship Channel and George Bush Intercontinental Airport. Large logistics projects are also underway, including Grainger’s 1.2 million-square-foot distribution center in Hockley and BroadRange Logistics’ lease of the Northport Logistics Center. Despite low vacancy rates, CBRE reports continued
strong demand and steady growth expected into 2025 and beyond.

The growth across Houston’s industrial market, especially around logistics corridors like the Ship Channel and Intercontinental Airport, signals robust opportunities for manufacturers and logistics operators. For companies considering relocation or expansion in Texas, QBS offers end-to-end consulting services—from site selection and permitting to facility construction.

Reference:
https://www.houston.org/news/houstons-industrial-market-experiencing-growth-new-developmen
ts-and-leases

In 2025, Texas’s construction industry is driving unprecedented economic growth, powered by a surge of new residents, major business relocations, and transformative investments in technology and infrastructure. Landmark projects like Samsung’s $17 billion semiconductor facility in Taylor, the $288 million QTS DFW2-DC1 data center in Fort Worth, and the $1.1 billion Sequoia Solar Project west of Dallas highlight the state’s rapid evolution into a national leader in manufacturing, energy, and digital infrastructure. Across key hubs like Dallas-Fort Worth, Austin, San Antonio, and the Gulf Coast, Texas is building the foundation for sustained prosperity, fueled by both public and private investment.

Yet, this explosive expansion brings critical challenges. Strained power grids, water resources, and a shortage of skilled labor threaten to slow progress. To address these issues, Texas established the $5.38 billion Texas Energy Fund to boost grid capacity with new natural gas-fired plants and is encouraging renewable energy investments like Sequoia Solar. Innovative tech-led solutions—such as advanced cooling systems developed at the University of Texas—are helping high-demand facilities cut energy use. Meanwhile, workforce development initiatives aim to close the skilled labor gap, ensuring Texas can maintain its momentum while building a more resilient and sustainable future.

Reference: https://www.tradestarinc.com/2025/01/06/texas-construction-in-2025-trends-and-challenges/

The client’s primary goal was to establish a fully operational automotive parts manufacturing plant in the U.S. while minimizing risks and costs. This involved overcoming complex regulatory requirements, securing financial incentives, and collaborating with multiple stakeholders, including local governments, landlords, and utility providers. Each step demanded a strategic approach to ensure smooth progress and avoid costly delays.

One critical challenge was securing environmental permits from the Texas Commission on Environmental Quality (TCEQ) to ensure compliance with air quality and emissions regulations for their foaming and injection molding processes. Additionally, the facility required electrical infrastructure upgrades, including identifying power requirements and installing appropriate transformers to support heavy manufacturing equipment. To further ensure safety and compliance, QBS managed the UL certification process, confirming all imported machinery met U.S. standards before installation and operation.

The project also involved significant construction and site adaptations to transform the leased 218,400-square-foot facility in Mustang Ridge, Austin, into a production-ready space. This included building a durable, high-traffic driveway, which required fast turnaround and effective management of contractors and permits. Successfully navigating these challenges meant coordinating with regulatory bodies, utility providers, and construction teams to ensure the setup was not only efficient but fully compliant. QBS’s hands-on approach and expertise helped the client achieve their goals, creating a foundation for sustainable, long-term operations.

Texas is experiencing a historic surge in industrial construction, driven by energy, manufacturing, and exports. Three major federal programs—the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and the CHIPS and Science Act—are fueling a new wave of projects, particularly in technology and energy transition sectors.

The state is also witnessing a rapid expansion of data centers, fueled by increasing demand for artificial intelligence and cloud-based services. These developments depend on Texas’ strong energy sector, with wind and solar playing a growing role in the power supply.

Texas has long been a leader in industrial growth, from the high-tech boom of the late 20th century to the shale oil and gas revolution of the past 15 years. The state’s business-friendly policies and skilled workforce continue to attract major investments.

Notable projects include:

• Texas Instruments: Opening the first of four new manufacturing plants in Sherman, with a $30 billion investment and $1.6 billion in federal CHIPS Act funding.

• GlobalWafers: Building a 3.2 million-square-foot semiconductor facility in Sherman, receiving $400 million in federal funding.

• Samsung Electronics: Constructing a $17 billion semiconductor facility in Taylor, backed by $6.4 billion in CHIPS Act funds, with additional projects in the pipeline totaling at least $40 billion.

With continued federal support and Texas’ strategic position as an industrial hub, the state is poised for long-term growth in energy, manufacturing, and technology.

Reference: https://www.dallasfed.org/research/swe/2025/swe2501

Texas Rolls Out New Business Incentives to Boost Employment and Economic Growth 

Texas, a central hub for commerce in the United States, has recently enacted a series of new policy regulations to strengthen its position as a prime destination for businesses and manufacturing. At the heart of these policies is the attraction of investment and promotion of job growth, all while maintaining a business-friendly regulatory environment. 

The Texas Enterprise Fund (TEF) serves as a primary tool for the state government, offering financial subsidies to attract new business investments and create job opportunities. This fund particularly targets businesses deliberating between Texas and other locations, providing the necessary economic incentives. 

Although the Chapter 313 program, offering tax value limitation agreements to businesses, has concluded, it serves as a prime example of how Texas has utilized tax incentives to attract businesses. Through this program, businesses could receive a limitation on the appraised value of their property for tax purposes over a certain period, reducing operational costs. 

Additionally, the state has implemented the Skills Development Fund, a training program in collaboration with Texas’s community and technical colleges. This initiative offers customized job training programs to help businesses enhance their workforce skills. 

The Economic Development Sales Tax Exemption Program allows qualifying businesses to be exempt from state sales tax when purchasing equipment and materials for manufacturing, processing, or R&D, further reducing financial burdens for businesses and promoting technological innovation and product development. 

These policies reflect Texas’s commitment to business and economic growth, successfully attracting thousands of businesses to the state, leading to significant growth and diversification of the local economy. However, as the economy expands, Texas also faces the challenge of balancing growth with sustainability, especially in the context of rising housing costs and increasing infrastructure demands. 

Texas’s case provides a model for how policies can effectively attract business relocation and promote job growth. However, it also reminds policymakers and business leaders of the importance of considering long-term sustainability and community well-being in their economic strategies.