The US Is Building Factories At a Wildly Fast Rate

Factory construction in the United States has experienced significant growth, with construction spending by manufacturers more than doubling over the past year. For April 2023, the annual rate reached nearly $190 billion compared with $90 billion in June 2022, with manufacturing accounting for around 13% of non-government construction. […] Factories are being constructed everywhere from deserts to resort towns as the US tries to bring back manufacturing of goods commonly imported from lower-cost countries. Many battery and electric vehicle factories have popped up in the Rust Belt, while solar panel and renewable energy factories now span much of the South and Southeast. The US has added around 800,000 jobs in manufacturing employment over the last two years, employing around 13 million workers per the May Bureau of Labor Statistics jobs report (PDF). However, according to the National Association of Manufacturers, the manufacturing skills gap — caused by the labor market’s struggle to find workers with highly technical and manual expertise — could lead to 2.1 million unfilled jobs by 2030.

Manufacturing, though, has accelerated its move back to the US from other countries over the past year. According to Kearney’s 2022 Reshoring Index, 96% of American companies have shifted production to the US or are evaluating reshoring operations — a spike from 78% in the 2021 index. The sudden rise in factory construction corresponds with passage of the CHIPS and Science Act in July 2022, which provided $280 billion in funding to boost manufacturing of semiconductors, as well as the Inflation Reduction Act in August 2022. The IRA has sought to create new jobs in manufacturing, construction, and renewable energy, estimated to create up to 1.5 million jobs by 2030. Construction spending in most areas of the US economy has fallen in contrast, including office, health care, and educational construction. Residential construction has also declined amid a big cooldown from the pandemic housing market boom. Census Bureau data reveals manufacturing construction spending has escalated from January 2020 until April 2023 in every region except New England and the Mid Atlantic.