The US is in the grip of a factory-building boom as government incentives to spur domestic manufacturing, aimed at helping the economy compete with China, drive a wave of investment.
Construction spending by manufacturers in the US has more than doubled in the past year, reaching an annual rate of almost $190 billion in April, according to data published Thursday by the Census Bureau.
Manufacturing now accounts for about 13% of all non-government construction, the highest share on record in a data series stretching back to the early 1990s.
As part of the most ambitious US industrial policy in decades, the government is offering subsidies worth tens of billions of dollars for companies to make all kinds of key products — from semiconductors to electric cars and their components — at home.
The Biden administration says the programs, rolled out amid escalating tension with China, will help secure supply chains for strategic goods and bolster US leadership in industries like clean energy.
Among the giant US companies to get on board are Intel Corp. — which is investing some $20 billion to build a chip fabrication plant in Ohio — and Ford Motor Co., which broke ground last year on a Tennessee factory that will make electric trucks.
The factory-building boom comes at a time when residential construction — which accounts for by far the biggest share of the industry — is in decline, as the hot pandemic housing market cools off.
Most regions of the US are enjoying at least some of the fruits of the surge in manufacturing construction — with the exception of the Northeast, the one part of the country where spending has declined over the past year.
The US is trying to reverse, at least for certain industries, the long-term deindustrialization of its economy. Along with European countries, it’s seen a slide over several decades in the share of the workforce employed in manufacturing, as Asia took over the role of the world’s factory powerhouse.
China now accounts for about 30% of global value added from manufacturing, roughly double the US share, according to the World Bank.
© 2023 Bloomberg L.P.