U.S. Factory Construction Spending Has Doubled Since Last Year
Construction spending for new factories in the U.S. has more than doubled over the past year, new data from the Census Bureau shows.
Construction spending for factories reached $190B in April, far above the $90B reached in June 2022, Business Insider first reported. Manufacturing accounted for roughly 13% of nongovernment construction.
Roughly 200,000 manufacturing jobs have been added in the U.S. over the past two years, with 13 million workers employed in the industry today, Insider reported, citing figures from the Bureau of Labor Statistics jobs report from May.
The boom in manufacturing construction comes as billions of dollars in federal government spending start to be distributed, an attempt to accelerate domestic production of electric vehicles and solar panels.
Construction spending has dropped across other asset classes in the U.S., with office, education and healthcare construction spending all falling, per Insider.
Manufacturing construction was given a boon by the Inflation Reduction Act and the CHIPS and Science Act, which both passed last summer. The bills are intended to incentivize domestic manufacturing and help the U.S. compete with China, which currently accounts for 30% of global manufacturing value.
Factories are under development across all U.S. regions, per Census Bureau data, with construction spending in the South and Midwest increasing fastest this year. The Rust Belt has the highest share of new battery and electric vehicle factories, while the South and Southeast accounted for a higher share of new renewable energy and solar panel factories, Insider reported.
Some factories are also running into roadblocks, facing challenges under the National Environmental Policy Act and requirements to submit environmental reviews before they are allowed to operate. The review process, known as NEPA, is often blamed for years of delays to industrial operations.