Historically, the Southeast has been effective in attracting manufacturing projects. During the last few years, this investment has been driven by a convergence of factors, including reshoring, emerging technologies, government incentives, the energy transition, and consumer demand.

This resurgence has bolstered domestic production and triggered a substantial increase in capital investment in constructing new manufacturing facilities in North Carolina and South Carolina. In this article, we will explore the reasons behind the manufacturing boom in the United States, highlight emerging markets driving this trend, examine the impact of federal legislation and funding bills, and delve into the attractive benefits of manufacturing domestically.

One major factor driving this investment is reshoring. Reshoring, the practice of bringing manufacturing back to the United States, has played a pivotal role in the country’s manufacturing renaissance.

According to The Reshoring Initiative’s quarterly report for Q4 2022, a significant increase in manufacturing jobs was due to reshored production facilities in North America. That trend is bolstered by new facilities supported by government investment, the Chips and Infrastructure Acts, deglobalization trends, and accelerated Q4 job announcements.

Reshoring has ignited a manufacturing boom in the United States, driving significant capital investment in construction. The nation’s political stability, reliable power supply, skilled workforce, and proximity to clients make it an attractive location for manufacturers. Federal legislation and funding have further incentivized this trend. Construction firms can position themselves for success by specializing in emerging markets, staying informed, building relationships, and emphasizing sustainability. By doing so, they can thrive in the era of American manufacturing resurgence.

Emerging Markets Driving Reshoring:

• Semiconductors: The demand for semiconductors is surging, and the U.S. is striving to reduce reliance on foreign suppliers by boosting domestic semiconductor manufacturing.
• Electric Vehicles: With the global shift towards electric vehicles, the U.S. is positioning itself as a major hub for EV production, leading to increased construction of EV manufacturing plants.
• Data Centers: The digital age relies heavily on data centers, and the U.S. is witnessing a boom in data center construction to support the growing demand for cloud computing, artificial intelligence, and data storage.
• Life Sciences: The pandemic underscored the importance of domestic pharmaceutical and medical supply production. Additionally, advances in research and development have led to new RNA and other medications.
• Supply Chain: The manufacturing boom is also affecting the supply chain, creating new facilities and the need for efficient warehouse and logistics sites. This growth necessitates modern facilities equipped with features essential for successful manufacturing operations.

The impact of COVID-19 on the global supply chain played a pivotal role in accelerating the reshoring trend. The pandemic exposed vulnerabilities in international supply chains, leading many companies to reevaluate their reliance on distant suppliers. Disruptions in the production and transportation of critical goods highlighted the advantages of having manufacturing operations closer to home. This realization, and the need for resilient and flexible supply chains, fueled the urgency to restore production to the United States.

The Attractive Benefits of Manufacturing in the U.S.:

• Political Stability: The United States boasts a relatively stable political environment, which provides a secure foundation for businesses to thrive. This stability fosters investor confidence and reduces risks associated with manufacturing operations.
• Access to Reliable Power: The U.S. offers a robust and reliable power infrastructure, ensuring uninterrupted production processes. This reliability is critical for manufacturing operations dependent on consistent energy supply.
• Workforce Development: The U.S. has a highly skilled and adaptable workforce. Access to a skilled labor pool enables manufacturers to innovate and remain competitive in the global market.
• Proximity to Clients: Manufacturing in the U.S. often means being closer to the consumer base. Reduced shipping costs and transit times make it advantageous for companies to manufacture products locally.
• Impact of Federal Legislation and Funding Bills: The U.S. government has recognized the importance of reshoring and has taken measures to incentivize companies to invest in domestic manufacturing. Federal legislation and funding bills provide grants, tax incentives, and other financial support to companies willing to bring production back to the United States. These initiatives have played a significant role in encouraging capital investment in new manufacturing facilities.

Georgia, North Carolina, South Carolina, and Tennessee have emerged as prime beneficiaries of the significant investment in new manufacturing construction and offer several economic advantages for manufacturers.

Factors Driving Investment in the Southeast:

• Business-Friendly Environment: The Southeast states have cultivated business-friendly environments with favorable tax policies and regulatory frameworks, making it easier and more cost-effective for companies to operate.
• Skilled Workforce: These states boast a skilled and adaptable workforce, with robust training programs and educational institutions catering to manufacturing industries’ needs.
• Infrastructure: State and local governments have invested heavily in infrastructure development, ensuring excellent connectivity through highways, railways, and ports, facilitating the movement of goods.
• Proximity to Major Markets: Situated in the southeastern United States, these states offer proximity to major consumer markets on the East Coast, reducing transportation costs and transit times.
• Incentives: Both states provide various financial incentives, including tax credits and grants, to attract manufacturing companies and support their growth.

The combination of these factors has made the Southeast a highly attractive destination for manufacturers looking to establish or expand their operations, contributing to their economic growth and resilience in the face of global economic challenges.