The factory-building boom under way across the US played a key part in driving an unexpected acceleration of the economy in the second quarter.
Business investment in manufacturing facilities surged to the highest level in records that go back to the late 1950s, according to data published Thursday by the Bureau of Economic Analysis.
Spending on factory construction has almost doubled in the past year, after the Biden administration passed laws that provide hundreds of billions of dollars in subsidies and other support for industries like clean energy and semiconductors. Business giants like Ford Motor Co. and Intel Corp., along with plenty of smaller firms, are tapping the government programs to build new plants.
The pickup in corporate investment last quarter offset a slowdown in consumer spending, and helped economic growth to accelerate to 2.4% when most economists expected it to fall back a bit.
Spending on manufacturing construction contributed almost 0.4 percentage point to growth in the period, the biggest share since 1981, according to calculations by the White House Council of Economic Advisers.
© 2023 Bloomberg L.P.