As DFB pointed out elsewhere, real inflation-adjusted investment in construction in the manufacturing sector is booming like never before:
Construction spending on streets and highways is also up almost 25%.
If I may quote a Financial Times article:
The federal stimulus includes $1.2tn in infrastructure spending, $369bn from the Inflation Reduction Act (IRA) for clean energy projects, and $39bn from the CHIPS and Science Act to spearhead the country’s production of semiconductors.
Construction unemployment sat at 4.6 per cent in 2022, the second lowest on record, according to the BLS. Hourly wages averaged $36 an hour in January, exceeding the private industry average of $33 and typical starting salaries for college graduates.
Despite increasing wages, 80 per cent of construction companies say they are struggling to hire workers, according to a survey by the Associated General Contractors of America last month.
In Columbus, Ohio, Intel has pledged $20bn to build two semiconductor factories, and Honda is building a $4.4bn battery plant with LG Energy Solution. The projects will require nearly 10,000 construction workers.
“The entire state of Ohio does not have the number of professionals to perform this alone,” said Catherine Hunt Ryan, manufacturing and technology president of Bechtel, one of the companies building Intel’s factories.
Bechtel said it will pull some of the 7,000 workers it needs from across the country and is in conversation with hotels for temporary housing. A middle-ranking labourer at the site could make as much as $40 per hour.
“The reshoring of manufacturing to the United States is creating a huge demand for construction workers in what was and continues to be an already tight labour market,” said Jim Brownrigg, senior vice-president at Turner Construction, the group working on the Honda-LG venture. Brownrigg said its demand for clean tech construction projects had more than quadrupled since last year.
“[Labor shortages] continue to be a bigger challenge. I think 2023 is going to be challenging. [Next year] could even be bigger,” he said. Brownrigg added that the company was investing in off-site construction and workforce development programmes and pulling workers from elsewhere to alleviate labour shortages.
Biden has made workers’ rights central to his industrial agenda and has repeatedly talked of “good-paying union jobs”. Some tax credits in the IRA and Chips act require companies to meet prevailing wage and apprenticeship requirements.
But construction bosses say the criteria presents another headwind by further narrowing the labour pool. There were nearly 200,000 registered construction apprentices in 2021, according to the Department of Labor.
The Department of Labor said it was “urgently” trying to meet the demand for workers, adding that the administration has invested more than $330mn in apprenticeships.
So, yeah, maybe this business cycle is still young despite the rapid monetary tightening going on. As said during the BBB debate, more spending and redistribution will allow us to raise interest rates with minimal damage to the real economy, and we can finally get out of the cycle of repeatedly inflating and bursting asset bubble that we've had for the past 40 years.
Rapid monetary tightening is harming some sectors (tech, real estate, retail) but other sectors such as construction, manufacturing, etc. are seeing the effects of enormous government stimulus and booming business investment. The service sector is settling into slow but stable growth, but manufacturing (especially durable goods) continues to see strong, healthy growth.
(Also, the salt in the comment sections on these article from the MAGA crowd is delicious. If Trump had actually decided to govern and pass his trillion dollar infrastructure bill in 2017 instead of trying to strip people of their health insurance, pass a massive handout to the rich, and then whine all the time on Twitter, we'd never hear the end of it on how he would have been a true working class jobs President or whatever)