The South Becomes The Industrial King

What’s going on? After decades of severe underinvestment and offshoring, U.S. manufacturing has seen a tide change in the 2020s with billions pouring into ambitious projects for battery, solar cell, semiconductor manufacturing, and more. "We believe the U.S. is in the early stages of a manufacturing supercycle," said the head of CIO Market Strategy at Merrill and Bank of America Private Bank.

The scope: Manufacturers' construction spending has tripled since the 2010s to hit an annual rate nearing $190 billion in April. Manufacturers are behind 13 percent of all non-government construction, marking the highest share since the early 1990s.

Why? The resurgence in U.S. manufacturing began under former President Donald Trump as a reaction to globalist trade policies. Now, Biden’s spending is fueling investment surges, predominantly in the South.

The changing South

Georgia Gov. Brian Kemp previously said he wants Georgia to be the "electric mobility capital of America." The availability of expansive land plots, low tax rates, and business-friendly regulations in his state make it an attractive destination for manufacturers and investors.

Foreign investment: Foreign investment plays a significant role in the surge of manufacturing. International companies recognize the strategic importance of having large-scale production facilities in the U.S.. Two European companies, for instance, recently announced a $2 billion investment for a synthetic natural gas plant in Texas.

Politics: Over 80 percent of electric vehicle investments after the passage of the Inflation Reduction Act have gone to Republican-controlled districts. It’s significant that most of the investment catalyzed by Biden's policies is going to Southern regions that generally do not share his politics.