Markets Wired

WASHINGTON — Today, the U.S. Department of the Treasury’s Office Economic Policy released an analysis of the surge in construction spending for manufacturing in the United States. Since the end of 2021, and the passage of President Biden’s Invest in America Agenda –  Infrastructure Investment and Jobs Act (IIJA), Inflation Reduction Act (IRA), and CHIPS Act –  real manufacturing construction spending has doubled. As Secretary Yellen has outlined, the Biden Administration is pursuing an economic approach based on “modern supply side economics” which seeks to expand the productive capacity of the American economy by investing in things like infrastructure, high-tech manufacturing, and workers.   

The analysis, authored by Acting Assistant Secretary for Economic Policy Eric Van Nostrand, Deputy Assistant Secretary for Macroeconomics Tara Sinclair, and Special Assistant for Economic Policy Samarth Gupta looks to unpack the context behind the surge. 

Highlights from the analysis:

• The boom is principally driven by construction for computer, electronic, and electrical manufacturing—a relatively small share of manufacturing construction over the past few decades, but now a dominant component.
• Manufacturing construction is one element of a broader increase in U.S. non-residential construction spending, alongside new building for public and private infrastructure following the IIJA. The manufacturing surge has not crowded out other types of construction spending, which generally continue to strengthen.
• While it can be difficult to compare such granular data across countries, the surge appears to be uniquely American—not mirrored in other advanced economies.

Read the full analysis here.

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