In its latest Manufacturing Outlook Report, Deloitte1 highlights that in 2023, the U.S. manufacturing industry benefited from three key pieces of legislation enacted in 2021 and 2022:
- Infrastructure Investment and Jobs Act (IIJA)
- Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act
- Inflation Reduction Act (IRA)
These laws focused on rebuilding infrastructure, promoting clean energy, bolstering the semiconductor industry, and fostering job growth, workforce development, equity; and drove a strong uptick in construction spending in the manufacturing sector.
- A Financial Times article by Amanda Chu2, notes that investment in semiconductor and clean technology manufacturing nearly doubled commitments made in 2021 and are nearly x20 the amount allocated in 2019.
- An Environmental Entrepreneurs article3 on Oct. 16, 2023, notes that passage from the IRA led to the announcement of close to 200 new clean technology manufacturing facilities – representing $8B in investment.
- Per Deloitte2, “As of July 2023, annual construction spending in manufacturing stands at $201B, representing a 70% year-over-year increase”
Despite the introduction of funds and tax incentives driving record amounts of private sector investments, it is noted1 that the U.S. manufacturing industry faces headwinds.
Current Status
Shortages on skilled labor, supply chain disruptions and technology advancements needed to meet company-set net-zero emissions goals, all contribute to ongoing challenges and resulted in the contraction of the manufacturing industry within 20231:
- The U.S. Census Bureau4 reported U.S. manufacturing corporations’ overall seasonally adjusted after-tax profits in Q3 2023 as $226.6B, up $21.1B from the after-tax profits of $205.5B recorded in Q2 2023, but down $15.2B from the after-tax profits of $241.8B recorded in the Q3 2022.
- Seasonally adjusted sales for the quarter totaled $2,010.5B, up $22.1B from the $1,988.4B recorded in Q2 2023, but down $94.5B from the $2,105B recorded in Q3 20224.
- While Nondurable Goods Manufacturers, Durable Goods Manufacturers, and Wholesale Trade Corporations trended mostly in alignment with the segment contraction, Information Services Corporations’ seasonally adjusted sales for the quarter totaled $423.B, up $8.1B from the $415.3B recorded in Q2 2023, and up $17.2B from the $406.1B recorded in Q3 20224.
Thank you for taking the time to read our industry insights. We truly appreciate your interest in staying updated with the latest trends and news within the manufacturing sector.
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Source: us/en/insights/industry/manufacturing/manufacturing-industry-outlook.html/#endnote-2. (2) Amanda Chu and Oliver Roeder, “US manufacturing commitments double after Biden subsidies launched,” Financial Times, April 16, 2023. (3) Environmental Entrepreneurs, “Clean economy works: Tracking new clean energy projects across United States,” (4) United States Census Bureau. “Manufacturing, Mining, and Wholesale Trade: Quarterly Financial Report.” Census.gov, www.census.gov/econ/qfr/mmws/current/qfr_mg.pdf. (5) Oracle. “Industrial Manufacturing Trends.” Oracle, January 2024, www.oracle.com/industrial-manufacturing/industrial-manufacturing-trends/
