No one believed that manufacturing could be brought back to the US. Except Biden and Harris. And they did it. They really did it!
Here’s Clean Technica with the big picture:
A Manufacturing Revolution Is Underway in the USA
No matter which way you cut it, the Inflation Reduction Act and the Bipartisan Infrastructure Law are stimulating a massive reinvestment in manufacturing, infrastructure, and good working-class jobs in the United States. After decades of complaints, political potshots, and genuine economic pain from the loss of such working-class jobs, we now have an administration that is doing something about the crisis and reversing the trend. And we had Democrats in control of the House and the Senate long enough to strongly support the president’s efforts and pass legislation that would enable the success.
We are now beginning to reap the rewards — and there’s much more to come in the years ahead.
The Financial Times (FT) reported some amazing specifics:
US manufacturing commitments double after subsidies launched
The investment in semiconductor and clean tech investments is almost double the commitments made in the same sectors in the whole of 2021, and nearly 20 times the amount in 2019, according to data compiled by the Financial Times.
While the FT identified four projects worth at least $1bn each in these sectors in 2019, there were 31 of that size after August 2022.
There has been more than $40bn in planned capital spending since the start of the year. Asian giants LG, Hanwha, and LONGI have all announced deals in the past month, taking total large-scale investments to $204bn on April 14.
“We see right now the tectonic plates are shifting with respect to investment in the United States,” said US energy secretary Jennifer Granholm this week, referring to the surge of investment in recent months.
Fortune gave a few stunning figures:
The administration’s massive manufacturing push is working and U.S. companies have already committed $200 billion to new projects
The Biden administration’s efforts to revive U.S. manufacturing appear to be succeeding, with some business sectors plowing in almost 20 times the investment in new U.S. manufacturing projects versus only a few years ago.
And Axios emphasized:
Manufacturing companies double commitments, with “gains spread across the country.”
- The White House points to huge semiconductor-manufacturing plans for North Carolina, Ohio, Arizona and upstate New York.
- The Commerce Department announced Friday that 200+ companies have submitted statements of interest for CHIPS and Science Act funding for projects in 35 states.
What they're saying: "The last administration talked a lot about bringing jobs back to America, but failed to take real action. [This one] is taking action and delivering results — creating good-paying manufacturing jobs at home," White House chief of staff Jeff Zients said in a statement to Axios.
The Hill gave more details (I’m quoting just a few!):
How big investments spurred a factory boom
A surge in manufacturing construction across the country is grabbing the attention of economists and workers on the ground as legislative efforts to reinvigorate the U.S. industrial base are bearing fruit.
Experts say these changes have been long-awaited, and they represent a watershed moment for U.S. heavy industry and a shift toward more environmentally friendly methods of production amid an ongoing climate emergency.
“We waited for so long to have these kinds of initiatives,” Miki Banu, a professor of mechanical engineering at the University of Michigan, told The Hill. “This is probably the first time in my life when I’ve seen so many resources become available, which are able to let us put our ideas into practice.”
[ . . . ]
Initiatives to reshore U.S. manufacturing jobs in the wake of geopolitical tensions fanned by the coronavirus pandemic have been a key focus for senior Biden administration officials.
This has been especially true for the semiconductor industry, which experienced a major shortage following the pandemic. The semiconductor industry’s concentration in traditional East Asian manufacturing hubs like Taiwan helped to spur the passage of the CHIPS Act over concerns about the territorial ambitions of China, the U.S.’s main economic rival.
But even larger-scale trends in the international economy and growing dissatisfaction with global trade may be providing tailwinds to the U.S. construction manufacturing bonanza.
And CAPAction20 summarized the result:
Policies Are Revitalizing Chip Manufacturing in America
New laws are incentivizing chip manufacturers to bring operations to the United States, creating tens of thousands of American jobs, boosting the use of made-in-America semiconductors, and spurring investments in workforce training and education programs.
Paul Krugman contrasted the Biden-Harris know-how with the self-defeating approach of TFG:
Making Manufacturing Great Again
Why are [the administration’s] policies producing a manufacturing revival but Trump policies didn’t? Well, Trump’s trade policy was simply incompetent: Because it raised tariffs on industrial inputs as well as consumer goods, it raised costs and may well have reduced manufacturing employment. And the Trump tax cut was based on the belief that if you let corporations keep more of their profits, they’ll invest the money rather than use it to, say, buy back shares; this belief was proved wrong.
Biden’s industrial policies, by contrast, are largely focused on creating demand for U.S.-manufactured products, for example by subsidizing the purchase of electric vehicles. And business investment, while far less sensitive to tax rates than legend has it, is very responsive to demand.
And so we’re having a huge manufacturing revival.
And what was the result last year?
Manufacturing investment reached historic highs
In 2023 Q3, real (inflation-adjusted) private manufacturing construction investment reached its highest level on record since 1958. Likewise, manufacturing construction contributed the most to year-on-year real GDP growth on record. A major factor in this historic manufacturing boom has been the Inflation Reduction Act.
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