In particular, private sector analysts have recognized the connection between the growth in construction for electronics manufacturing and the CHIPS Act. Still, the legislation has played a critical part in continuing and expanding this trend. This rise in the spending began in the months before the CHIPS Act passed, as many factors beyond policy contribute to construction spending. In fact, construction for chemical, transportation, and food/beverage manufacturing is also up from 2022, albeit much less than the computer/electronic sector. Importantly, the boom in this segment has not been offset by reduced spending on other manufacturing construction segments, which are largely consistent with long-term levels (Figure 3). Today, the computer/electronic segment is the dominant component of U.S. But by considering deflated measures as we do here, it is clear that the surge is a real one (see Appendix for a more detailed discussion of our choice of deflator). Construction costs have risen quickly in recent years, and therefore nominal spending growth should not be misconstrued as increased physical construction. The adjustment for price increases is particularly important here. Since the beginning of 2022, real spending on construction for that specific type of manufacturing has nearly quadrupled (Figure 2). Within real construction spending on manufacturing, most of the growth has been driven by computer, electronics, and electrical manufacturing. 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. Finally, we put the trend in international context.The manufacturing surge has not crowded out other types of construction spending, which generally continue to strengthen.

non-residential construction spending, alongside new building for public and private infrastructure following the IIJA.

Manufacturing construction is one element of a broader increase in U.S.

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.

We explore the surge along three key dimensions: The surge comes in a supportive policy environment for manufacturing construction: the Infrastructure Investment and Jobs Act (IIJA), Inflation Reduction Act (IRA), and CHIPS Act each provided direct funding and tax incentives for public and private manufacturing construction. Real manufacturing construction spending has doubled since the end of 2021 (Figure 1). The United States has experienced a striking surge in construction spending for manufacturing facilities. Samarth Gupta, Special Assistant for Economic Policy Tara Sinclair, Deputy Assistant Secretary for Macroeconomics

Eric Van Nostrand, Acting Assistant Secretary for Economic Policy

Unpacking cost