FEATURE | MANUFACTURING
It is uncertain whether that will change. In fact, Michael Guckes, chief economist at ConstructConnect, is projecting that on the back of several megaprojects, including the TSMC Fab 3 semiconductor fabrication plant in Arizona, the value of US manufacturing construction starts could increase by 38% in 2025. Robert Beightol, director of marketing at Gorbel, says this comes as individual companies are examining ways to be more efficient in their manufacturing processes and making investments despite all of the global economic uncertainties. He admits that companies are in the middle of
trying to figure everything out and taking different approaches. “Some companies are waiting for more clarity before moving for with large investments while some other companies who may be experiencing pain currently but may see a rosy picture down the road are investing now.” But, overall, Beightol says that companies
are learning to work through the uncertainty that most industries are facing and to keep their eyes focused down the road as, for the most part, their pain should be short term with manufacturing activity likely to improve over the long run. “Generally manufacturing companies have been making good decisions and have been successfully making money,” Piso says. Although he also noted that one wildcard is the tariffs, including where they will ultimately settle and what the end result will be once all is said and done – including their impact upon the onshoring of manufacturing. Piso noted that while some onshoring is
already occurring, it is uncertain when the impact of any additional moves in this direction will be felt as it takes time to make an investment, build a brick and mortar facility, hire workers and to install equipment – including cranes. Conductix-Wampfler’s Roberts agreed, noting that typically overhead cranes and automated warehouse equipment are usually purchased and installed several months after projects are approved. That is definitely the case at new greenfield facilities, where it needs to follow the site acquisition and the initial infrastructure development.
this manufacturing activity tends to move in line with consumer confidence, which, as measured by the indices of both the Conference Board and the University of Michigan, trended downwards in recent months. Also, Roberts pointed out that the higher interest rates have also had an impact. These market dynamics also affect manufacturing related construction. AGC’s Simonson pointed out that two years ago manufacturing had been a very hot segment as far as US construction activity, including some huge investments – or planned investments – particularly for facilities to manufacture
semiconductors, electric vehicles and batteries for those EVs. Simonson noted that these manufacturing investments had been stimulated by three big investment spending bills that were passed during the Biden administration – the Infrastructure Investment & Jobs Act (IIJA), the Inflation Reduction Act (IRA) and the CHIPS & Science Act. However, some of the incentives in those bills either have or could be cut, and the US Census Bureau reported that, in June, US manufacturing spending declined for a fourth consecutive month that was 6.1% lower year on year.
Actions required, not just words There have also been recent announcements of plans for reshoring of manufacturing, including the widely publicised mid-August announcement that GE Appliances is planning to relocate gas range production from Mexico to its newly upgraded LaFayette, GA, manufacturing facility. Schenker says that he is expecting US OEMs
to make further reshoring announcements – not just because of the tariffs themselves, but also because of Trump’s 31 July executive order, which contained a clause aimed at preventing the transshipment of imports by China and other countries in order to circumvent anti-dumping duties. He says that is sending an important message to the marketplace.
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