Construction Trend Tuesday covers one (hopefully) interesting industry trend in a quick, two minute read. You can access the archive of CTT posts here.
Manufacturing-related construction surged from 2021 to 2024 as firms—frustrated by supply chain challenges and shipment delays and spurred on by federal incentives—began reshoring production to America.
Alas, that trend is over. Manufacturing-related construction spending has now fallen in each of the past six months and is down an alarming 7.3% since reaching an all-time high last summer.
Of course, context is important here. Spending is still 193% higher than it was 5 years ago, even if momentum has stalled.
Even with that context, there’s reason to worry; it’s not just manufacturing-related construction that’s struggling, it’s manufacturing. The industry has lost 42,000 jobs since April, which just so happens to be when the Liberation Day tariffs were announced.
Approximately 50% of U.S. imports are inputs to manufacturing. Higher taxes (like 50% tariffs on steel, aluminum, and copper) are wreaking havoc on industry operations. Immigration enforcement actions—like the one last week at Hyundai’s plant in Georgia—aren’t helping either, at least from the perspective of stimulating production and investment.
What’s Next
This week brings us a critical update on inflation. We’ll dive into that and more in Week in Review, our every-Friday post that covers all the economic news and data in a breezy, five minute read.
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