Manufacturing Supercycle: US Sees Boom in Heavy Industry Investment

The U.S. is experiencing a significant rise in investment in its heavy industry, marking a possible economic trend shift with long-term implications. Dubbed the "manufacturing supercycle," this development comes after a decade of chronic underinvestment. Now, substantial funding is being directed towards large-scale megaprojects such as batteries, solar cells, and semiconductors.

The boom is being fueled by President Biden's Inflation Reduction Act, Bipartisan Infrastructure Law, and CHIPS and Science Act, alongside pent-up demand. The trend indicates persistent increased demand for workers and raw materials in the coming years. Joseph Quinlan, head of CIO Market Strategy at Merrill and Bank of America Private Bank, sees this supercycle extending into the latter half of the 2020s, largely driven by foreign direct investment.

As of April, spending on manufacturing construction is at a $189 billion annual rate, triple the average rate of the 2010s. This trend contributes to the strength of the U.S. economy, even amid fears of a recession. The supercycle is expected to alter the economic landscape of the U.S. through the 2020s, creating more high-wage jobs and increasing demand for capital.

Source: Axios

Bullish on America - this will take a few years before it has a big impact on freight flows, but it is bullish for trucking and rail, bearish for ocean container shipping https://t.co/TtQ2ZV9kxc

— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) June 12, 2023

The re-industrialization of the US: Massive new investment is pouring into US heavy industry, shaping the economic landscape for years to come. The 2010s were a period of chronic underinvestment. Now, billions are flooding into big, expensive megaprojects to make batteries, solar… pic.twitter.com/r0WgpPi87l

— Holger Zschaepitz (@Schuldensuehner) June 17, 2023