Boom in the construction of new factories in the USA. The IRA works
The Inflation Reduction Act and the impacts of the pandemic and geopolitics on supply chains are leading to a literal boom in the construction of new industrial plants in the US.
Spending on factory construction is at a record high, thanks to clean energy incentives in the IRA and efforts to refocus supply chains to the US, especially for semiconductors and the supply of critical materials for electric vehicles and renewable energy, according to analysts and industry officials.
Manufacturing-related housing spending hit a record $108 billion in 2022, according to Census Bureau data cited by the Wall Street Journal.
The CHIPS and Science Act and the IRA are expected to lead to the creation of new manufacturing businesses and hundreds of thousands of jobs, and some estimates already point to increased demand for jobs in the clean energy sector.
IRA provides nearly $370 billion in climate and clean energy provisions, including credits for investment and production in solar, wind, storage, critical minerals, energy research funding and technology production credits for clean energy such as wind turbines and solar panels.
Some European companies have also announced expansion into the United States, attracted by the provisions of the IRA, also in order not to risk being excluded from such a rich market.
Since the IRA was passed, BMW has announced a $1.7 billion investment in its U.S. operations, including $1 billion to prepare for EV production at its Spartanburg plant and $700 million dollars to build a new high voltage battery assembly plant in nearby Woodruff, SC
Norway's FREYR Battery announced plans to build a US Gigafactory in Georgia in November.
“Expansion in the US has been a key aspect of FREYR's long-term strategy since its inception, and with the recent passage of the Inflation Reduction Act, we expect US demand for ESS, electric passenger vehicles and of other electric mobility applications will grow rapidly over the next decade,” said Tom Einar Jensen, co-founder and CEO of FREYR.
Manufacturing-related construction remained the best-performing among non-residential construction segments in the fourth quarter of 2022, accounting and consulting services firm Marcum LLP said in its Marcum Commercial Construction Index for the fourth quarter of 2022. 2022.
“A combination of trade tensions, pandemic anxiety in the supply chain and an ensuing production reallocation effort has led to a number of massive domestic manufacturing projects,” said Anirban Basu, Chief Construction Economist at Marcum.
“As a result, manufacturing-related construction spending has increased by 58.2% since the start of the pandemic, well above the 6.6% increase in overall non-residential spending.”
“Among companies engaged in international trade, 62.3 percent plan to increase investment and/or sourcing in the United States after reevaluating their company's supply chains,” the survey found.
At the same time, three-quarters of manufacturers cited an inability to attract and retain employees as their top challenge, ahead of other concerns including rising raw material costs, supply chain challenges, rising health and insurance costs, the weakening of the national economy and an unfavorable commercial climate, the association found.
According to a report by Climate Power, clean energy projects and jobs are booming. Green energy companies announced 101,036 new jobs in 31 states between the IRA approval date August 16, 2022, and January 31, 2023. At the end of January, there were more than 90 new clean energy projects in cities and towns nationwide, totaling $89.5 billion in new investment, according to Climate Power.
So the IRA and CHIP rules, designed to help US industry in an autarkic perspective, are working, while the European rules achieve nothing…
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The article Boom in the construction of new factories in the USA. The IRA works comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/boom-della-costruzione-di-nuove-fabbriche-negli-usa-lira-funziona/ on Wed, 12 Apr 2023 07:00:45 +0000.