01 Sep 2023 1 min read

Chart of the month: A surge in US manufacturing investment

By Tim Drayson

US manufacturing investment has risen sharply in recent quarters, with a focus on domestic factories across the tech sector. But can this last?


US growth has been resilient so far this year which we previously noted could be due to some stealth fiscal easing. We have also seen a surge in manufacturing investment in structures which we believe is related to the tax credits contained in the CHIPS Act and Inflation Reduction Act.

The monthly construction data reveal a huge increase in computer, electrical and electronic facilities.We think this largely represents onshoring in semiconductor fabrication, battery and electric vehicle factories. In recent months there have been fewer high profile announcements, which means that spending is set to continue for a few more quarters as the factories are completed, but the rate of growth should fade rapidly.

Tim Drayson

Head of Economics

Tim keeps a close watch on global economic developments, with a particular focus on the US. He believes nothing good ever happens after midnight, which is why he is rarely spotted out late. Tim joined in 2008 from the number-one ranked economics team at ABN AMRO, with prior experience from HM Treasury, and graduated with a MSc from the University of Nottingham. When not crunching economic data, he can be found studying the weather forecast, analysing his cycling statistics or looking anxious on three-foot putts.

Tim Drayson