Manufacturing Construction Spending Declines Under Trump

Spending to build, grow and rehabilitate manufacturing sites successful the U.S. has declined since President Donald Trump took office, according to U.S. Census Bureau data. Yet, Trump has repeatedly boasted that “factory construction” is up 41%.

Trump cited the 41% statistic successful a White House property league connected Jan. 20 – calling it a “record” summation and suggesting that different presidents cannot comparison to this “record.” 

“Investment successful American factories is up 41%. That’s a record. Nobody goes 41% up. You spell 2% up, 1% up. You spell down by 3%. If Kamala [Harris] got elected, the 41% up would beryllium 41% down,” Trump said astatine the property conference, referring to the erstwhile vice president and Democratic statesmanlike nominee who mislaid to Trump successful the 2024 election.

A time later, successful a Jan. 21 speech astatine the World Economic Forum Annual Meeting successful Davos, Switzerland, Trump repeated the 41% figure. 

“Factory operation is up by 41%, and that fig is truly going to skyrocket close now, due to the fact that that’s during a process that they’re putting successful to get their approvals and we’ve fixed very, precise quick, accelerated approvals,” Trump said. 

This assertion is portion of a taxable the president has emphasized of a “manufacturing boom” oregon “booming” system owed to his commercialized policies.

At our request, the White House sent america a nexus to the Census Bureau’s manufacturing operation spending data via the Federal Reserve Bank of St. Louis’ online database known arsenic FRED. We supply much astir the White House effect later, but let’s absorption archetypal connected what the information show.

Under President Joe Biden — who served from Jan. 20, 2021, to Jan. 20, 2025 — determination was a important summation successful manufacturing operation spending successful each 4 years, according to the Census Bureau’s yearly mean estimates. After declining 6.9% successful 2020 – the past twelvemonth of Trump’s archetypal word – manufacturing operation spending started to emergence successful 2021, the information show. 

(Technical note: The Census Bureau provides mean quarterly and annual estimates and monthly reports for operation spending, including manufacturing operation spending, based connected its monthly Value of Construction Put successful Place survey. We usage each 3 successful this story.) 

Initially, the increases during the Biden years were successful effect to the COVID-19 pandemic, Anirban Basu, main economist for the Associated Builders and Contractors, an manufacture commercialized association, told america successful an email. 

“Supply concatenation disruptions astatine the commencement of the COVID-19 pandemic convinced galore producers to reshore capacity, portion a abrupt and crisp summation successful operation materials prices—which roseate much than 40% during the aboriginal years of the pandemic—also boosted nominal operation spending,” Basu said. 

Manufacturing operation spending accelerated aft Biden signed authorities successful August 2022 designed to promote backstage concern successful U.S. manufacturing for semiconductors and clean energy. The bipartisan CHIPS Act, for example, included $39 cardinal to assistance money semiconductor manufacturing facilities successful the U.S., arsenic explained successful an April 2023 report by the Congressional Research Service.

During Biden’s 4 years, the annual mean rate of manufacturing operation spending jumped much than 200%, from $75.5 cardinal to $235.6 billion, according to Census Bureau estimates. Spending surged 62% successful a azygous twelvemonth – 2023, a twelvemonth aft Biden signed the CHIPS Act. 

But manufacturing operation spending peaked successful the 3rd 4th of 2024 and has been trending down somewhat ever since. Census Bureau quarterly data amusement that nether Trump, measuring from the past 4th successful 2024 done the 3rd 4th successful 2025, spending declined 6.7%. 

That diminution is expected to proceed successful 2026 and 2027, according to the most caller survey of operation economists that is conducted doubly a twelvemonth by the American Institute of Architects.

“Manufacturing operation spending has seen phenomenal maturation successful caller years, expanding by implicit 50% successful 2022, different 62% successful 2023, and past different 16% successful 2024,” the AIA statement operation forecast published Jan. 15 said. “However, maturation paused past twelvemonth arsenic spending successful this class fell astir 5% and is projected to diminution different 4% this twelvemonth and 1% successful 2027.”

Despite the flimsy declines, the AIA operation forecast noted that the semiconductor fabrication plants proceed to substance manufacturing operation spending and volition bash truthful successful the agelong term.

“The longer-term prospects look overmuch much promising, arsenic operation starts for manufacturing projects person changeable up again,” the AIA forecast said. “Since galore of these starts are for megaprojects, specified arsenic ample semiconductor fabrication plants that entail a analyzable operation process, it whitethorn instrumentality a portion earlier the enactment shows up successful the operation spending data.”

In January, Basu analyzed the Census Bureau’s most caller monthly report for nonresidential operation spending, which showed manufacturing operation spending arsenic of October had declined for 9 consecutive months. 

“With CHIPS Act-enabled megaprojects winding down and the stiff headwind of commercialized policy, manufacturing operation spending has fallen by astir 10% implicit the past 12 months, accounting for much than the full diminution successful backstage nonresidential spending,” Basu said in an ABC property release issued Jan. 21. (By “trade policy,” Basu is referring to the economic interaction of Trump’s tariffs connected operation materials.)

On a monthly basis, the Census Bureau shows a 7.3% diminution successful manufacturing operation spending past twelvemonth nether Trump from January done October, the astir caller information available.

Beginning connected Jan. 23, we asked the White House connected aggregate occasions to supply enactment for the 41% fig utilized successful Trump’s Jan. 20 and 21 remarks. After not receiving a response, we sent different email connected Feb. 2 aft the president wrote an opinion piece for the Wall Street Journal connected Jan. 30 that said, “Factory operation is up by 42% since 2022.” We asked however it arrived astatine a 42% summation “since 2022.” That evening, the White House sent america a nexus to the Census Bureau’s manufacturing operation spending data, saying it compared “averages of Jan – August 2025 vs 2021-2024 average.”

That’s existent — arsenic acold arsenic it goes. On an annualized basis, monthly manufacturing operation spending averaged $226.1 cardinal for January done August — which is 40% higher than the yearly mean of $161.1 cardinal successful Biden’s 4 years. But Trump wrote that the 42% summation was “since 2022,” not 2021. (We’ve asked the White House for a clarification.)

More importantly, the White House methodology fails to instrumentality into relationship the 212% increase successful mill operation spending implicit Biden’s 4 years, which peaked successful 2024 astatine an yearly mean of $235.6 billion, and however the Biden-era CHIPS Act continues to substance manufacturing operation spending.

As we noted earlier, Basu attributed the caller diminution to Trump’s tariffs and the slowing — not the halting — of operation projects spurred by the CHIPS Act. Asked to elaborate connected his analysis, Basu told america that the manufacturing operation spending successful 2025 is “largely due” to the CHIPS Act.

“While spending successful the conception remains elevated from 2022 levels, that’s partially owed to a precipitous summation successful materials prices that occurred successful 2022 and 2023 — these information are successful nominal presumption — and mostly owed to the surge successful megaproject enactment induced by the CHIPS Act,” Basu said.

He added that Trump’s tariffs person helped thrust up the costs of fabricated metallic — which has accrued manufacturing operation costs.

“[I]t should beryllium noted that spending successful the fabricated metallic manufacturing subsegment is up 19% implicit the past year,” Basu said. “Some of the summation tin beryllium contributed to tariffs and the resulting summation successful request for home production.”

We should enactment that adjacent with the caller surge successful manufacturing operation spending, determination has been a diminution successful the fig of manufacturing jobs. As we reported past month, the system mislaid 63,000 manufacturing jobs successful Trump’s archetypal 11 months. That followed a nonaccomplishment of 98,000 successful the preceding 11 months, according to the Bureau of Labor Statistics.

Shortly earlier Biden near office, Manufacturing Today, a commercialized magazine, wrote successful December 2024 that manufacturing jobs were dilatory to materialize contempt Biden’s incentives to spur manufacturing construction. But the mag predicted the jobs “will materialize successful the future.”

“Unlike accepted concern projects, today’s semiconductor and cleanable vigor facilities necessitate longer timelines,” the nonfiction said. “Factories of this standard tin instrumentality 2 to 3 years to complete, with adjacent longer delays for much analyzable facilities, specified arsenic semiconductor plants. This extended timeline means the afloat benefits volition not beryllium realized for respective much years.”

Basu agreed that CHIPS-related spending volition effect successful an wide summation successful U.S. manufacturing jobs – but cautioned that the interaction of Trump’s tariffs could offset those gains. 

“The monolithic facilities incentivized by the CHIPS Act volition employment thousands of people,” Basu told us. “That said, each other is not equal, and caller commercialized argumentation and the effects connected manufacturing input prices person enactment downward unit connected the industry’s employment.” (Input prices are costs of materials and different resources manufacturers request to nutrient goods, with immoderate of those materials being imported.)

Others are bullish that Trump’s commercialized policies volition promote much manufacturers to grow successful the U.S. 

In April, erstwhile Trump announced higher tariffs connected astir each overseas imports, Morgan Stanley expert Chris Snyder called tariffs “a affirmative catalyst” for relocating manufacturing to the U.S. More recently, Snyder said successful a podcast past period that the tariffs person changed the “supply concatenation outgo calculation” and volition effect successful caller U.S. factories. 

“What we’re seeing is the outgo of imports person gone higher with tariffs, and present it’s much economically advisable for these companies to marque the merchandise successful the United States,” Snyder said. “And if that’s the case, that means that erstwhile they request a caller factory, it’s going to travel to the United States. They mightiness not request a mill now, but erstwhile they do, the U.S. is astatine slightest incrementally amended positioned to get that factory.”

In a January quality article, the Wall Street Journal wrote that Trump’s tariffs “haven’t worked, truthful far.” The nonfiction said tariffs person accrued manufacturers’ costs for overseas parts, adding that the “White House’s stop-and-start” tariff argumentation announcements person “also led to what galore executives presumption arsenic a mislaid twelvemonth for investment.”

In a December interview with the Wall Street Journal, Trump cited — as helium often does — the worth of investments that helium says his medication has secured to date. (As we’ve written, helium has exaggerated pledges to put made by assorted companies and countries that whitethorn oregon whitethorn not materialize, experts say.) But helium couldn’t accidental if the investments would amusement results successful clip for the midterm elections, erstwhile the Republican Party is successful jeopardy of losing its slim bulk successful the House. “I can’t archer you. I don’t cognize erstwhile each of this wealth is going to footwear in,” the president told the Journal, adding that it whitethorn hap successful the 2nd 4th of this year.

What volition hap successful the coming months and years remains to beryllium seen. But what we tin accidental is that mill operation truthful acold has declined nether Trump and his assertion that it has accrued 41% depends connected a spending surge that occurred nether Biden. 

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