#691 – America’s New Factory Building FrenzyPosted on
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America’s New Factory Building Frenzy
IndustryWeek.com | Jill Jusko | Jun 15, 2018
A flurry of new manufacturing facilities has begun popping up across the U.S. In this environment of low unemployment, skills deficits and shifting corporate paradigms, this abundance is rife with challenge and potential.
Foxconn Technology Group commanded headlines last summer in the U.S. when it announced plans to invest $10 billion to build an enormous manufacturing technology campus in Wisconsin. It’s easy to see why—the project, which is expected to break ground later this month, includes a factory to produce LCD display panels and a commitment to create a whopping 13,000 jobs.
It is a gigantic, exciting project. But it’s hardly the only major U.S. manufacturing project in the works.
Earlier this year Mazda and Toyota announced plans to open a joint assembly facility in Huntsville, Ala. And Braidy Industries broke ground in early June on construction of what it says will be the nation’s first greenfield aluminum rolling mill in more than three decades—a project worth an estimated $1.3 billion, which will transform a 370-acre site in Greenup County in Kentucky and promises to create some 550 permanent jobs.
We could also talk about Volvo Cars USA, which kicks off production later this year in its new Berkeley County, S.C., site with the redesigned S60 sedan. Or Nucor Corp. and its two rebar micro mill projects, or Cleveland-Cliffs Inc., which has designs on Toledo. Or the scores of other new plants and expansions that are underway, recently opened or freshly proposed.
Taking a look at the full picture, it appears that U.S. manufacturing is experiencing something of a baby boom. With all the good news in industrial reports lately, this probably shouldn’t come as surprise.
U.S. manufacturing recorded its 21st consecutive month of growth in May, the Institute for Supply Management reported in its monthly gauge of the sector. That’s nearly two years of continued growth.
Moreover, vacancy rates for U.S. manufacturing have dropped to 3.8%, “well below the 10-year average of 7.3%,” wrote Jason Tolliver in a recent column for Area Development. Tolliver, who is vice president and head of industrial research, Americas, for real estate services firm Cushman & Wakefield, also pointed out that manufacturing construction has rebounded.
“The current average of 12.5 million square feet of new manufacturing product added per year is close to the pre-recession average of 12.6 million square feet,” he wrote. “Since 2010, 62.5 million square feet of manufacturing space has come online in the United States.”
That’s a lot of new manufacturing space in play, with a significant number of “expectant” manufacturers likely to add to U.S. square footage soon.
It’s good news, even great news, but challenging nevertheless in an environment of low unemployment and skills deficits, coupled with the pressures that accompany multimillion-dollar projects.