America Is Quietly Starting to Make Things Again

I spent most of this morning trying to find something good happening in this country that is not being talked about and oddly enough I kept coming back to manufacturing.

According to the Institute for Supply Management (ISM), U.S. manufacturing expanded again in July. The Manufacturing PMI came in at 55.6, which is the highest it has been since May 2022. New orders were up, production increased and manufacturing employment finally moved into expansion after 33 months of going the other direction.

What I found more interesting was what companies are building and why.

AI has a lot to do with it, which I hadn’t really thought about this way before.

When people talk about artificial intelligence, most of the conversation is about automation. But AI needs an enormous amount of physical infrastructure.

Those data centers have to be built somewhere, and they need a ridiculous amount of power. They also need generators, cooling systems, transformers, electrical equipment, steel, bearings and all kinds of industrial equipment that is decidedly less exciting than talking about the future of artificial intelligence.

Generac is spending $250 million to expand production of its larger commercial generators and expects to hire about 1,000 people. The company already has around $1.6 billion in backlog tied to demand.

Siemens is investing another $200 million in U.S. plants.

Even companies making things like bearings and industrial hoses are getting more business out of this.

Then I started looking at pharmaceuticals.

More than $500 billion in U.S. commitments involving pharmaceutical manufacturing, research and supply chains have been announced over the last couple of years.

Pfizer has talked about $70 billion. Johnson & Johnson raised its U.S. investment figure to $55 billion. Eli Lilly is planning six plants here. Roche and AstraZeneca have both announced more than $50 billion.

Bristol Myers Squibb announced this month that it is building a $2.3 billion manufacturing facility in Houston. It will be around 600,000 square feet and is expected to create nearly 500 permanent skilled jobs. Around 2,000 people are expected to work on the construction.

Micron has also increased its planned U.S. semiconductor investment to more than $250 billion through 2035, with projects in New York, Idaho and Virginia.

And then there are critical minerals.

The Department of Energy recently put $500 million into seven projects involving domestic processing of lithium, cobalt and other materials we rely on for batteries, electronics, defense systems and a lot of the technology we use every day.

One of those projects is supposed to create the only cobalt refinery in the country, in Idaho.

We spent decades moving parts of our manufacturing and supply chains overseas because it was cheaper. Then COVID hit and everybody suddenly discovered how much of the stuff we needed was being made somewhere else.

I’m not pretending there isn’t another side to this.

Manufacturing here costs more. Tariffs raise costs too, and some of those costs eventually end up with us.

A new factory today also doesn’t mean thousands and thousands of jobs the way it might have fifty years ago, because automation changed that.

Some of these projects will probably never be built. There will be companies that announce huge investments and quietly shrink them later when nobody is paying attention.

And I still have questions about how much of the current manufacturing demand is being driven by the insane amount of money pouring into AI. If that slows down, there are going to be companies that expanded for demand that suddenly isn’t there anymore.

The ISM report itself wasn’t exactly sunshine and rainbows either. Manufacturers are still complaining about higher costs, supply problems and uncertainty.

So no, I don’t think American manufacturing is suddenly fixed, but I do think something has changed.

Not every one of those investments will work out, but considering how long we spent watching this stuff leave the country, I’m pretty happy to see some of it coming back.