From Plans to Starts: Examining Recent Trends in Manufacturing Plant Construction

Eirik E. Brandsaas, Robert Kurtzman and Joseph B. Nichols
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Eirik E. Brandsaas: https://www.federalreserve.gov/econres/eirik-e-brandsaas.htm
Joseph B. Nichols: https://www.federalreserve.gov/econres/joseph-b-nichols.htm

No 2025-01-14, FEDS Notes from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Manufacturing structures investment is the largest component by value of U.S. nonresidential structure investment and has been growing quickly in the post-pandemic period. Figure 1 documents the significant extent to which the construction of manufacturing plants has contributed to growth in overall nonresidential construction. The surge in investment in manufacturing construction has occurred despite the higher interest rate environment, driven by government incentives associated with the Inflation Reduction Act (IRA) and the CHIPS and Science Act (CHIPS), and market forces such as increased demand for semiconductors and batteries and the re-shoring of supply chains.1 However, there have also been reports of delays and changes in the scope of these planned projects.2 This note uses micro-level data on manufacturing plans and starts to analyze recent patterns in such activity for manufacturing plants.

Date: 2025-01-14
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfn:2025-01-14

DOI: 10.17016/2380-7172.3667

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