Construction Spending on US Manufacturing Plants Soars, to De-Globalize Supply Chains?

The driver: computer, electronic, and electrical manufacturing.

By Wolf Richter for WOLF STREET.

The amount spent on building manufacturing plants in May in the US jumped by 73% from a year ago, and by 147% from May 2021, to $15.7 billion, according to Census Bureau data today. This by far outpaces the increase in construction costs (more on that in a moment).

Over the six years between 2015 and 2020, construction spending on factories has stagnated roughly between $6 billion and $7 billion a month. But in the spring of 2021, spending began to rise, and then surge amid the global supply chain chaos raging at the time. The driver behind the surge of construction spending now is computer, electronic, and electrical manufacturing.

Construction spending on factories is interesting because of the long-term outlook it provides on the US manufacturing sector – particularly regarding computer, electronic, and electrical manufacturing.

Nonresidential construction spending overall in May rose 17% year-over-year and 26% from two years ago to a record of $90 billion, driven in part by surging construction costs.

Nonresidential construction, in addition to factories, includes: lodging, office, commercial, healthcare, education, religious, public safety, amusement & recreation, transportation, communication, power, highway and street, sewage and waste disposal, water supply, and conservation and development.

Nonresidential construction spending is very seasonal with a low in January and a high in the summer (green line). The red line reflects the 12-month moving average, which irons out the seasonality:

We’ve already seen another sign the economy is flying at cruising altitude and refuses to land, even with short-term interest rates over 5%: Multifamily Construction Starts Spiked to Highest since 1986, Single-Family Starts Bounce.

The share of manufacturing within nonresidential construction has doubled over the past two years, from a share of 8.9% in May 2021 to a share of 17.5% in May 2023. By looking at the percentage share, we eliminate the effects of rising construction costs:

Computer, electronic, and electrical manufacturing plants have been the primary drivers behind the surge of factory construction, according to an analysis in June by the Treasury Department.

These types of plants had been a relatively small component of factory construction over the past few decades. Now these plants dominate construction spending on factories, according to the Treasury analysis.

Adjusted for inflation based on construction costs, “real” spending on the construction of plants for computer, electronics, and electrical manufacturing has nearly quadrupled, according to the Treasury Department analysis last month.

The boom in manufacturing construction spending started in early 2021, likely in response to the pandemic era supply-chain chaos and transportation nightmares that wreaked havoc on globalized supply strategies and led to previously unimaginable shortages.

While the boom in manufacturing construction started over a year before the CHIPS Act was passed in August 2022, it is likely that the CHIPS Act has since then further accelerated the construction of manufacturing plants for tech products.

In its analysis, the Treasury Department said that the surge in construction of manufacturing plants appears to be a US phenomenon, when compared to other advanced economies:

  • “Japan has seen increases in the floor area of new manufacturing over the past year, but remains below pre-pandemic levels.
  • “Germany’s real new construction spending on factory and workshop buildings has remained relatively stable over the past decade.
  • “Notably, the United Kingdom and Australia did see meaningful increases in real industrial construction in 2022, rising about 40 percent from 2021 levels. But those series have leveled off since then, over the period in which U.S. manufacturing construction has nearly doubled.”

An investment boom in US factories is a welcome turn of events because “real” manufacturing output – adjusted for price increases – has been roughly flat for 17 years, amid rampant offshoring and globalization of supply chains by US companies, the very thing that then got these companies tangled up in chaos in 2020 and 2021.

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  188 comments for “Construction Spending on US Manufacturing Plants Soars, to De-Globalize Supply Chains?

  1. RepubAnon says:

    As Britain noticed during WW1 and WW2, long supply chains relying on ocvean transport can be disrupted fairly easily.

    • SpencerG says:

      Perhaps. But it is a different world today. In September 1939 the number of transatlantic flights was two per WEEK from two different airlines… BOAC and PanAm. In 2022 the number of transatlantic flights is almost 1000 per DAY.

      • Leo says:

        What makes these manufacturing plants think that they can compete with “Made in China”?

        Were they really offered guarantees through import sanctions, or large import duties?

        If not, we are just building new unicorns.

        If yes, this is still just assembled in US and the supply chain of rare earth metals will remain a headache

        • Wolf Richter says:

          “What makes these manufacturing plants think that they can compete with “Made in China”?”

          Automation. Industrial robots cost the same anywhere. They’re the great equalizer.

          This works for high-value goods. Might not work for T-shirts. Make T-shirts in Bangladesh. Make semiconductors, cars, batteries, electronics, industrial robots, oil and gas drilling equipment, etc. in the US – something like that.

        • Evelyn WoodHead says:

          When this current inflationary period is finally over with along with the Phillips Curve, an American worker’s wages proportionality to the goods and services that the American spends on them may possibly be equal to the Chinese workers wage’s proportionality of goods and services that the Chinese spends on them; maybe even higher by the time this inflation is over with. We will then be globally competitive in manufacturing high value discrete goods because the Americans wages will then be competitive globally.

          If annual inflation is > then 5% (Say over the long run 7.5%) and wage increases are <= to 5%, the American's standard of living is declining more rapidly then when inflation is 2% and no wage increases are provided.

          Personally, as an hourly wage earner, on a typical living wage, I am definitely already feeling poorer; and this is just the beginning of this inflation.

        • Flea says:

          Manufactures dumped America for bigger profits ,now taxpayer pays to bring it back ,PONZI .Greed created this let them pay there own way .Forgot politicians won’t get there stipend

        • Thomas Curtis says:

          Evelyn WoodHead

          “American worker’s wages proportionality to the goods and services that the American spends on them may possibly be equal to the Chinese workers wage’s”

          I think there is something to this and that there will be more to it the longer we go. Half of the U.S. has few skills and little understanding of the world. The world will have to greatly economically equalize if we are to meet future challenges well.

        • Sams says:

          As Wolf say, machines and equipment has the same cost worldwide. US labour is as cheap as Chinese, but US management maybe more costly. Quality and cost of infrastrukturcture may be deciding. As politics like tariffs.

        • Leo says:

          “Automation. Industrial robots cost the same anywhere. ”

          Unfortunately, most industrial automation / robots need manual maintenance. The cost of a medium skilled engineer or mechanic is very different between US and China. Same with the cost of land, the cost of assembling these robots, the cost of raw products that these robots process.

          All they have to do is to bump up the cost of rare earth metals and the chip manufacturers robots along their AI will go cockoo :).

          I would love the US to manufacture more, but boosting mainstreet will first require us to bust the fake wallstreet bubble.

          Its true that China has some of these bubbles also, but plot a home price or stock index chart next to the ones from US, and it’s very easy to notice which bubble has more crap.

          “Dump Wallstreet to save Mainstreet “!

        • Eric says:

          Emergence beats top-down every time.
          As long as U.S. remains free, we will crush China in the years ahead.
          They are playing our game now.

        • phillip jeffreys says:

          We’ll find out 22 August!

        • Cody says:

          I note that all of the statistics and anecdotes all agree that Chinese labor is not anywhere near as cheap as it was 20 years ago, and the Chinese government is nowhere near as easy to deal with.

          At some point, higher worker wages, higher bribes, and worse government meddling are all costs of business that make a corporation look elsewhere to put their plant.

          Seems like that moment has been reached.

      • Sit26 says:

        Just focus on freight tonnage. Sea versus air. It is a no-brainer. Without even bothering to look it up.

        • phillip jeffreys says:

          Yes and no. Basically, very little new ship capacity/actual ship building over the last decade.

      • sufferinsucatash says:

        And your point?

      • Raul says:

        AND? Elaborate. Ketchup on the flight to replenish store shelves?

    • joedidee says:

      nothing like big govt $$(free of course) going little ways

    • Cas127 says:

      Good analogy.

      Moving away from WW 2, there is a tension between efficiency (make it where cheapest) and resilience (make it here…regardless of cost…) but in like everything else, a sense of proportion here is very useful.

      Basically US leadership went 100% Chinese opium den.

      And then refused to evolve for 20 years, willing rather to engage in historically unprecedented financial distortions in order to mitigate the real world consequences of 100% opium den.

      An intermediate fix is simply diversifying away from 1 import source…but that seems to have eluded US business/political leadership for 15 years.


      I’m sure that G subsidized reshoring will lead to vast malinvestment (again) but it is a measure of how bad the 20 yrs disaster has been, that any reshoring at all is likely an improvement.

      • Apple says:

        It was corporate CEO’s that jumped on the outsourcing to China bandwagon and kicked American workers under the bus.

        • Blam 35 says:

          It was nafta and free trade.polcies.since Clinton that allowed businesses to offshore production.

          Diversifying your economy and moving some productive base back in the US has great cultural, economic and technical advantages. Why shouldn’t this be subsidized by tax dollars; much less wasteful and more constructive than military spending and a smart move to provide opportunities to communities and working people. About time the fed government remembered its true role in facilitating a diverse domestic economy. Plus, chat GPT can’t fix a robot.

        • sufferinsucatash says:

          Yes! For amazing bonuses. To sell us out.

          a story as old as time…

      • Question Everything says:

        I am impressed how you summarized a big factor in recent financial, economic, and industrial history of our country. Your comment was pretty short for how much you were able to actually say. I see more comments recently that seem to match what I have postulated in my own mind some years ago about what the government is really up to or blind to (combination of the two) in regards to financial policy and economics. The things is, I thought I used to be an outlier who was too skeptical of the government and always assume there is a an inner circle of shadowy figures who control the levers of power and democracy and free-market capitalism are largely carefully crafted and evolved illusions. When things start to shift to such types of opinions or thoughts being much more common, I think that marks a notable transition point and it will affect the topics you originally were talking about, as in an amplifying feedback loop. In the wizard of Oz, when they pulled back the curtain……………….

        • Evelyn WoodHead says:

          Laissez Faire has to be managed even though the word connotes non management; there is no secret about that, it’s just that in high school government class, they never explained how our government manages it so it seems dark and mysterious to the proletariat but it’s really not mysterious it simply logical.

      • VintageVNvet says:

        Thanks Cas10 for reporting the reality that China and those associated biz folks around the world, but especially the Brits who HAD owned Hong Kong BRIBED our USA political puppets — of both sides — with billions of USD to enable the wholesale movement of manufacturing, including even the nuts and bolts for the machinery.
        Watched up close one county where over 10% of the population was put out of work manufacturing, then less than 1% put back to work ”assembling” the same stuff for minimum wages, but even that assembly work went away after a few more years.
        Devastated the local economy and hurt badly the regional economy as well.
        Products definitely became very ”value engineered”/degraded to point of brand oblivion.

        • longstreet says:

          Trump was slammed for placing tariffs on the Chinese…
          and those slamming were hauling water for those who are plugged into China.
          But it is my understanding that the tariffs so placed were done in a fashion to “counter” unfair trade practices and defend critical industry to the survival of the US. Ok by me.
          It is “…advantageous to lay some burden on foreign for the encouragement of domestic industry….when some particular sort of industry is critical for the defense of the country.” Adam Smith, “Wealth of Nations, Book IV, Chpt 2

      • Natron says:

        If there’s one thing I’ve noticed about the general population and our leaders, a “sense of proportion” ain’t it.

      • phillip jeffreys says:

        Review Washington Consensus. There’s a logic behind what has unfolded post USSR collapse. But that may be coming to an end.

        US sanctions/FOREX wipes have ****ed off too many global players.

    • Shiloh1 says:

      The Kaiser noticed, too.

  2. Bond Vigilante Wannabe says:

    Construction delays and related issues may finally be the thing that gets credit spreads moving.

    Given that most of this construction will get repeatedly delayed (it always does) that opens up mezzanine bond offerings at higher rates.

    Construction loans from banks are probably going to be at higher rates than the bond market will offer.

    Then we will probably see junk bond yields start to spike because there will be competition for higher quality bonds being offered at much higher rates.

    Any thoughts on capitalization of the spending for the construction? Is it coming from governments, corporate retained earnings, bond issuances? If there is a potential shortfall coming up, then that would help time the credit spread shift.

    Credit spreads are the introduction to the next phase of this cycle, so will be critical!

  3. TaxHaven says:

    In the coming years of high(er) interest rates, where are consumers going to find the discretionary income to rent in all the new, more expensive apartments going up? How are they going to afford each new tech toy? Are they going to be replacing or updating their devices as often as before?

    Rates HAVE to fall because this system needs ever more “money”

    • Bond Vigilante Wannabe says:

      Probably not. High interest rates are primarily a function of inflation.

      If inflation stays high, so will interest rates.

      There will be winners and losers.

      Keep in mind that about half of the US population is shrugging off the inflation at current levels. They don’t like it, but they don’t stop spending.

      Same thing happened 1966 to early 1980s.

      • Miller says:

        Not sure I’d say half of Americans are “shrugging the inflation off”, a lot are just going deeper into debt to deal with it, leads to a financial time-bomb. Especially when the inflation hits so hard in areas like rent, cars and food. Eventually people just cancel their leases, move out to cheaper outlying or higher crime areas (sadly know several such cases), move back with family or get multiple roommates, with lousy quality of life.

        But things like inflation in food and healthcare are even harder to manage–how do you deal with ex. a 30 percent increase in ER costs if you break a leg or get Covid? Or what if your car breaks down or gets hit by a drunk driver, and even the used beaters are costing upwards of $25 or $30K? It’s not like someone can just “shrug it off”, health insurance will often weasel out of covering all those healthcare inflation costs, so maybe they just put it on a credit card. Anyway, it’s not sustainable and just like these crazy soaring rents, it has to come down without financially breaking the back of Americans.

        • Bond Vigilante Wannabe says:

          I would like to think that will happen, but probably not.

          Take a look at France to get an idea of a comparable scenario– high inflation, but about half the population is shrugging it off (yes they are going into debt, but it isn’t affecting their behavior).

          The other half got very angry about policing, which was the spark that ignited the overall economic and social frustration into mass civil unrest.

          Same thing happened in the 1960s and 1970s in the US.

          Probably coming here at some point.

          These things can carry on far longer than you can imagine.

          It could easily be like this (or worse) for the next 15 years.

          Given that– what is your gameplan?

        • Arnold says:

          The cure for healthcare inflation is healthcare inflation.

          Eventually, the solution will present itself when people are ready to accept it.

        • BENW says:

          Half sounds about right . . . for now. Overall, the economy is doing very well all things considered.

          To a certain degree, you’re cherry picking, but your points are well taken. Housing and healthcare are consuming way too much income.

          The problem is will Congress trot out rent & mortgage relief, once a recession arrives? I wouldn’t bet against this happening. And how do you get healthcare to take a much needed pay cut?

      • Thomas Curtis says:

        Yes, many people are shrugging off inflation and not just consumers. I did very well last year staying short large index ETFs because Wallstreet in general does not understand inflation.

        Now I am settling my investments into long haul inflation plays.

    • Cas127 says:

      “where are consumers going to find the discretionary income to rent in all the new, more expensive apartments”

      Any increased supply = lowered median cost. Older complexes will have to drop rates to compete with newer, better complexes.

      • Herpderp says:

        This. Right now rat and flea infested 600sqft apartments rent for $3500 plus tip. Getting those new units up will help adjust the slums back to the price point they deserve to be.

        • Biker Chique 01 says:

          Absolutely. The investors did not calculate their future returns on rent based on rat and cockroach invested hovels renting at exorbitant rates, say $3,500/month. So, of course, within same ZIP Code, newly constructed luxury apartments of 1,200 sq ft, 3 parking spots included, with concierge service will be rented at a monthly rate of $1,100. REITS and other investors who participate in residential rental markets perform an altruistic service and are not driven at all by achieving optimum profit/returns on their investments.

    • Question Everything says:

      So it’s obvious from the comments here that these “Luxury Apartment” complexes sprouting up like mushrooms on shit isn’t just where I’m at, it’s not just my area being completely changed in 4 years into McDonald’s style living. They’re not even good at polishing these turds. New doesn’t mean well designed or built. The way it has all been done, it seems like there is some main push from high up to get all these built, to the point that those who you think would be financing it must be doing it with no regards for financial risk and assessing the market capacity. A lot of these apartments where I live have serious problems and just reading reviews from people who lived in them will show that they are built with the intention to unload the development as fast as possible after the buildings are complete (these aren’t condos being sold, just apartments for rent). Is this at all similar to fake economic stimulation like what China tried to do years back with it’s residential high rise cities that were empty? It really seems like whoever is funding this, their primary concern is not just sensible financial investments and good mid to long term business decisions. Or it could be something worse like intentionally transforming the U.S. into a society of mostly renters who serve the feudal lords and what is going on is simply the rapid build out the necessary modern infrastructure to allow such a new-era feudalism to be able to settle in along the divisions of wealth that have been established, with the mortar rapidly curing now and a lot of people and their children and their grandchildren will be locked into the economic class that they are in currently.

      • Toby says:

        No, your way of base.
        The reason there is a lot of mulitfamily constrcution is because there is a hughe lack and a big need for multifamily housing.

        The problem is that in most zoning areas they weren’t allowed to be build and that is slowly changing. Cheap single family homes aren’t cheap if you need to commute over 30min one way. and that is considered short today lmao.

        There is no affordablility without density. Everything else is just subsidised infrastructure.

        • Ccat says:

          higher density raises, not lowers, costs per unit. Density is logarithmically expensive. Housing is cheaper where density is lower. Take a look at the real world. This is true in every industry.

      • elbowwilham says:

        They have been pretty direct with the direction they want to go. I know “own nothing and be happy” is a meme now, but it started out and remains a serious goal of WEF and ESG (blackrock). They are not hiding this either. Look up 15 minute cities, or the flat city.

    • Augustus Frost says:

      The answer is they won’t.

      Living standards have to fall because the country is collectively consuming above its means. Interest rates don’t have to fall to continue the fantasy economy, as no one has a birthright to minimum living standards.

      The interest rate cycle almost certainly bottomed in 2020, after 39 years from 1981. Rates are destined to “blow out” years from now, inflation or not and regardless what the US FRB does or doesn’t do. There are no “wizards behind the curtain” who can magically create prosperity out of nothing.

      Actual US credit quality collectively is the worst ever, starting with the USG which is the wrost since at least WWII. It’s only a historically unprecednted credit mania which has enabled so many to live above their means for decades.

  4. rodolfo says:

    This is a great thing for USA. (And probably Mexico as well) more manufacturing jobs and business for suppliers will surely follow.

    • BENW says:

      What would be great for America is for us to onshore as much pharmaceuticals as possible, or least the really critical stuff.

      And we need to start innovating & manufacturing our of solar panels using as much automation as possible.

      And it goes without saying that we need to ramp up domestic production of rare earth materials.

      • MOFO says:

        Absolutely correct. We need to return meth and fentanyl production to the U.S.


    • Biker Chique 01 says:

      An one do factory work from resting on your couch? How about working on an assembly line while ensconced in a big puffy soft chair?
      The attitude of the US workforce is confrontational and refuses to comply with management directions. It will be difficult to operate efficiently/effectively factories with such intransigent workforce. Except for few niche products, the US will remain uncompetitive on the global markets. Output of these highly taxpayer subsidized factories will be consumed mostly within protected US markets. Reshoring will result in very few tangible future gains. Whereas the US enjoyed low inflationary environment, significantly due to low cost consumer goods manufactured by China, Eastern EU, and few others countries, US manufactured goods will result in significantly higher costs adding to future inflation. Longer supply chains will be replaced with work disruptions of the future workforce. In retrospect, solving supply chain problems will prove easier than dealing with combative, entitled, unionized workforce. IF longshoreman at US West Coast ports are dissatisfied with their wages and threatened strike actions, why would one assume that US workers will embrace enthusiastically re-shored jobs. ( On the wages/income of West Coast, CA., longshoreman … Full-time registered longshore workers earned an average of $197,514 in 2022, not including benefits, according to the PMA, working 2,000 hours or more per year, or 38.4 hours per week. Clerks working full time earned an average of $220,042 and foremen and walking bosses averaged $306,291.) Perfectly understandable how these “measly” compensation packages fail to motivate these workers and compel them into labor actions, strikes.

      • Oh Please... says:

        I’m sorry, but this is so out of reality it hurts to read. This myth of the lazy American worker just won’t seem to die. When migration declined a few years back all the buisness people moaned constantly about not being able to find anyone who wants to work but when you looked at the data, it was that they couldn’t find enough workers at that price point. Minimum wages are unlivable. We have to stop expecting people to have wage points similar to Chinese slave labor. Most of my friends and I work 2 to 3 jobs adding up to between 40 and 60 hours a week just to get by and maybe one day have a shot at a home, kids, and retirement. We are all in our 30s with a variety of college degrees but none of us work in our field now. Finally wages are rising in some places since the supply demand started shifting over the last couple years and a few of us are moving from 2 to 3 part time jobs to 1 full time with minimal benefits like insurance and a 401k.

        • El Katz says:

          I guess you never heard of the term “quiet quitting”. That’s kind of the definition of lazy.

          Minimum wage: If you’re in your 30’s and earning minimum wage, something’s wrong – especially if you have a “marketable” degree (aka something that has value to an employer). Companies don’t hire people as a charity move. The workers have to produce more than they cost or there’s no need for them.

      • JimL says:

        What are you basing these opinions on?

        I can think of numerous industries where your opinion is wrong and labor costs between the USA are negligible in the final cost of the product.

      • Gomp says:

        Central Planning. What a unique and wonderful concept? What could go wrong?

  5. Micheal Engel says:

    1) We need more fabs, pharma, shipyards and weapons factories to face China, even if the real output dives to the 2000/2001 backbone.
    2) CMBS industrial delinquencies is below multi families, hugging zero for three years, despite eight months of contracting ISM.
    3) The trend is strong, the trend is long. It started in 2020, when the real output was below 1998 correction.
    4) China might respond by flooding the market with mfg goods and by cutting prices ==> global overcapacity, deflation.

    • Miller says:

      Doubting it’s anything this dramatic, the main benefit of what Wolf is talking about is that the extra manufacturing plant activity will probably do a lot to reduce supply chain bottlenecks and therefore bring down inflation. One of the painful lessons from Covid is that “just in time” manufacturing and supply chains may cut costs and increase profits to the shareholders and board, but in crises like a pandemic, they leave us vulnerable to bad supply chain disruptions that drive costs way up. After the disaster of ZIRP and QE, this is probably the other big factor in the current inflation mess in the US and abroad, we just got too dependent on fragile supply chains and this drove up costs especially for cars. So this is a smart move.

      But de-globalization does not mean the same thing as that way overused term (to the point of nonsense) decoupling–the April 2023 trade deficit went way up especially due to a huge surge in imports, and even though it was down a little for May, the trade deficit was still huge especially for goods. The new manufacturing capacity means we have a lot more ability to make some important things, in such a sense yes we’re de-globalizing and making our supply chains more resistant to supply shocks like pandemics (CDC already talking about a new Covid mutant and new pandemics coming). But the new manufacturing capacity itself can often increase demand for both additional raw materials and for finished goods, many of which will still come in as imports due to price favorability or specialization, so that’s not decoupling as much as it’s making sure our supply chains don’t get tied up and send inflation raging. Other countries have also been increasing their own manufacturing for the same reason we have, provide some spare capacity and options in case of a disruption, and reduce supply chain bottlenecks that cause inflation. Since inflation has been going down in most places lately, this seems to be a factor globally in helping to bring prices down.

      • Question Everything says:

        That seems like a good analysis with important points. I especially like the point about expanding industrial activity and capacity in the U.S. likely to result in an increase in consumption from the source that was to be avoided.

      • phillip jeffreys says:

        Inflation has not been going down. The rate of inflation has been decreasing.

  6. polistra says:

    Best news in 30 years!

  7. Brant Lee says:

    If the manufacturing world is converting to robotics and AI, why not bring it home to the USA?

    • Arnold says:

      Good question.

    • Question Everything says:

      What I don’t understand about the claim of massive automation and expanded use of robots for manufacturing is, if companies are so short on workers for even non-skilled jobs, where are all these people appearing from that have the skills to design, build, install, test, optimize, and maintain all these robots? Do people think most electrical contractors have the skills and knowledge to be taking on projects with such complexity? I don’t. A lot of people are really good at what they do and know their stuff. But I don’t think we have enough of those people relative to our population and relative to other competing countries. If the future goes the way things are looking like this circus is taking us, certainly we will need armies of savant polymath maintenance men (women, other) who are able to work alone or in very small crews for long shifts, servicing and troubleshooting equipment that includes, hydraulics, pneumatics, electron beams, lasers, sensors, software, semiconductors and PCB’s, power supplies, power distribution, safety regulations, hazardous materials knowledge and procedures, ability to understand and perform some sophisticated calculations without always using specialized software, and likes to eat out of a lunch box every day.

      • BrianC - PDX says:

        “if companies are so short on workers for even non-skilled jobs, where are all these people appearing from that have the skills to design, build, install, test, optimize, and maintain all these robots?”

        Bingo! We have a winner.

        Design and programming can still be done overseas. Maint will be unskilled board/component swapping of field replaceable units. Plus low wage hourly people to load the outputs and carry away the outputs.

        No way US companies are going to pony up to maintain the salaries of the design and sustaining required to really do full automation on shore.

        Besides prototype and design is often a more manual process. You only automate the final mass production of the widgets.

      • Robert Hughes says:

        You’re comment is spot on. Look at 25 to 54 demographic curve, that population is decreasing both in % and real numbers and will so for a number of years. That is key work force. Especially severe is 50 to 60 year olds with many years of experience in technical stuff you mention who are retiring, leaving a big hole. Example. Reference stinger anti tank missiles. Currently defense producer scrambling to find old retired workers to come back to work to build these.

    • Toby says:

      AI is a lot of hot air and manufacturing has been automated 20 years ago. The current automation is happening in office jobs.

      • VintageVNvet says:

        Both correct IMO Toby, though AI does have some good looking ”promises not seen yet.”
        A decade or so ago, my main general contracting client was building facilities in several states designed as modern industrial activities learning centers focusing on ”state of the art” robotics.
        IIRC, individuals tuition was completely subsidized by public and private money, but only AFTER rigorous testing of abilities.

        • phillip jeffreys says:

          Can’t wait to see how product liability suits evolve as AI whoops moments increase.

      • longstreet says:

        “AI is a lot of hot air”
        They speak of AI in trading the markets….but computerized trading and algos have been used for a long long time. So, where is the “new AI”?

    • Flea says:

      Robotics have been here a long time I installed one in early 80 s .More propaganda just like AI . Siri is AI .but it might get better in 10 years

      • Wolf Richter says:

        1. AI has nothing to do with manufacturing. By definition, manufacturing is doing the same thing over and over again — so this is NOT an application for AI, but regular software and robotics.

        2. there is a HUGE amount of manufacturing in the US. By output, the US is the second largest manufacturing country behind China, and larger than Germany, Japan, and South Korea COMBINED. The problem is that the US isn’t the largest manufacturer, ahead of China.

        3. Nearly all of the mass production in the US is automated (robotics and software). It still requires some people, but they have to be far more skilled than before. A typical auto assembly plant in the US has 3,000 people, compared to 50,000 people many decades ago, and that plant produces more cars than the old plants, and the cars are far more complex to produce, and the manufacturing quality is incomparably higher today than decades ago. All thanks to robotics.

        • phillip jeffreys says:

          Industry concentration in many key sectors has resulted in a growing size, number and breadth of product recalls. Not clear how structural issues like this will be rectified by AI.

          We shall see. It’ll be interesting observing how Wall Street big biz responds to supply chain reformulations and changing geopolitical realities.

  8. Gabe says:

    It’s been ridiculous not to take advantage of the ‘Made in USA’ brand for the past 20+years. It’s well respected and had grown to be associated with high quality and value.

    China gave it’s manufacturing a brand of it’s own (cheap, low quality, hastily engineered, throwaway) that we can pounce upon as we move forward into a more sustainable future.

    Seems the USA might just be able to salvage the brand before it loses its lore. Better yet, before China tries to rugpull the western world with embargos and other means of financial ransom.

    LFG!! 💪🇺🇸 🌎

    • Miller says:

      Again, doubt anything so dramatic is happening here and we shouldn’t overdramatize things. The Made in USA brand never disappeared and the media goes way too off on that, even for the past decade the US has remained a big manufacturer and we still export a lot of things. So it’s not like there needs to be some kind of desperate campaign to salvage the brand, we’re doing fine. At the same time though, “made in China” doesn’t mean cheap or low-quality anymore, they’ve also moved way up the value chain and manufacture and sell a lot of high quality goods. They’re the biggest manufacturer and seller of solar cells and other green tech goods now, both high quality and affordable, make a lot of other top electronics and BYD is now the top maker of EV’s especially to developing countries partly because the cars are high quality and affordable.

      The whole meme of “made in China” being cheap and disposable needs to retire in the same way like the meme of “made in USA” being tied to a disappearing Rust Belt, it just hasn’t kept up with the times. Any of us who travels to business in China still does see a lot of poverty in the rural areas and many towns so yes, it’s still a developing country in a lot of ways. But its manufacturing centers and major cities are world class now and make some of the best products and tech, and it’s changed hugely in the past 5 years alone–even the US and Australian reports are now showing it’s a tech powerhouse that’s tops in most areas, making its own technology instead of copying our’s. Wages have gone way up–which is why they’re not sending so many people abroad anymore, and more immigrants are actually moving to China–because the value chain is higher, and quality is up, but still affordable for most buyers.

      The USA has no problem with manufacturing, the main problem we have is with the extra needless costs for all the dumb rent seeking that makes us less competitive. What bankrupted GM in the GFC wasn’t materials costs itself, it was the cost of healthcare for it’s workers. The US healthcare system is by far the most expensive in the world with the worst results (lowest life expectancy in developed countries) due to all the overcharging and middlemen. Same with US higher education and inflation in things like rent, way too expensive leaving American grads with need for higher wages to deal with those costs–but not extra buying power. This is why China has the world’s largest economy by far with GDP PPP calculations, their purchasing power is much higher because their costs for basic things are a lot lower, especially for things like healthcare and education. And this means they can also manufacture higher quality goods for lower cost and be more competitive. The United States can manufacture just fine, but to be more competitive on cost, need to overhaul all the rent seeking waste in healthcare, education and housing, get bribery money out of politics (Citizens United) and reduce our dependence on financialization, part of which led to ZIRP, QE and this money-printing inflation. Ironically here, also re-balancing currency value and a cheaper USD can also help to make our goods lower cost.

      • Apple says:

        By a wide margin, Americans prefer to have the most expensive healthcare system in the world.

        • MOFO says:

          I would guess that the U.S. population is the most morbidly obese society in the history of the world.

          This might have something to do with healthcare costs.


        • El Katz says:

          We don’t have “health” care in the U.S.. We have “sick” care. Lots of pill pushers in medicine (don’t change your diet, here… take this pill) and corporate influence in government (like the FDA food pyramid).

          One look at the “food pyramid” should crush any delusion of “health”. Did you notice that there was never any shortage of cheezy poofs during the pandemic? Real food was almost invisible, but junk food? On sale by the truckload! “Buy 5! Save $2 each!” There was also no shortage of booze or beer. Why would a government that wants a healthy population allow corporate food manufacturers to use seed oil in their products? The answer… is that there’s no money in healthy people. Sick people? Cha ching!

      • bulfinch says:

        Calling anything world class is always a red flag. If someone tells you their book collection or their cooking or their lovemaking skills are world class — run.

        China is not in league with Germany, Japan, America or Britain when it comes to any stage of any durable or industrial good production — from concept to manufacture on down to quality control & support. Phasing in inferior components mid-production, counterfeiting and the absolute absence of oversight where toxic chemicals are concerned are just a few top line items that have yet to be resolved in the past 20 years. No-ones ever gonna be on the hunt for the superior Chinese-made version of X,Y or Z.

        • Toby says:

          Made in China is not a homogenous term. There is a lot of high end stuff. Just look at DJY Drones, they are maket leader.

          But there is also a looot of crab and it is still quite difficult to know which is which when the brand names aren’t recognized.

      • Question Everything says:

        I think you said a lot of important things and people do fail to see or don’t want to admit what they see in regards to what you are talking about. Especially the point about manufacturing quality and technology of China. I have very well designed and well made equipment from German (and other countries) companies that is manufactured from China, that is often better than what is available (if anything) from any U.S.-based companies and manufacturing. I can’t deny what I see it when I buy expensive commercial and industrial grade equipment. A lot of things I use will also be made in Taiwan and depending how the distinction between Taiwan and China is made or how well it is understood, that can effect the perception some.

      • Kent says:

        One of the best comments I’ve read on this site. To add, one of the reasons I think a lot of Americans are so dissatisfied with the economy is that they have to spend so much on stuff that doesn’t bring happiness: health care, education, rent. When they would prefer to use the money for flashy cars, Vegas trips & boats.

        Unfortunately, few can see any feasible way fix health care, education and rent.

      • Bs ini says:

        Having lived and worked in 6 countries outside of USA what you provide for insight is so true. Recently late in my career I have had the pleasure of working with CNPC on an oil and gas project. They still can benefit greatly from USA and EU technology in that area. All countries have their issues. The financial engineering that has been introduced in USA is creating problems . Hard to quantify because society benefits and the cost of building towns and communities are not in the financial models of cash flow and expenses . Nor the ever rising costs of housing, medical, and other inflationary items. The USA still a great place to live and we will continue to prosper economically . Cheap energy is one area we have a large advantage . Go energy.

      • VintageVNvet says:

        Correction, Miller:
        ”At the same time though, “made in China” doesn’t mean cheap or low-quality anymore…”
        You left out the word necessarily between the doesn’t and mean…
        Certifiably, anyone buying small electrical tools knows this, with one of the largest retailers having three or more quality levels for each tool: some are cheap and well known to perform adequately for a short time; others, still cheaper than equal quality USA brands — now likely made in the same factory to be sure, but in China in most cases — quite worth the extra $ or $$.

      • Jana D says:

        Absolutely right. And housing may also get cheaper and cheaper (there’s way too much of it) and that is another cost for people that is low, along with education, medical, etc. So, workers can work for less here, and thus can make things competitively.

        How can USA compete when workers need to be paid so, so much just to get by?

      • 91B20 1stCav (AUS) says:

        …might add ‘propaganda’ (political advertising) money to the CU ‘bribery’ citation…

        may we all find a better day.

      • phillip jeffreys says:

        What’s the first thing asked when one walks into a healthcare facility?

        “What’s your insurance coverage?”

        Insurance is obviously important. But the system has been corrupted. Everyone charges everyone else in the healthcare chain – and Medicare, TRICARE, et al pay the bills. It’s kinda like University tuitions/fees. Gov’t gonna cover/award student loans? Cool! We’ll keep charging more!

    • joe2 says:

      It’s price. I compared some SS parts on price between China and US. The US parts were 10X the cost of the Chinese parts. Same for some carbon fiber parts. I bought the Chinese parts. They were fine. Chinese quality can be hit and miss. You just have to be careful like anything else.

      If top quality is really important like in accurate measurement equipment, I buy Japanese at whatever the price is.

      • Brant Lee says:

        For a wake-up call, back in the 1960s, the same manufacturing jokes were made about Made in Japan quality.

        Seems like it all changed when Deep Purple made that live album.

        • 91B20 1stCav (AUS) says:

          Brant – more accurately, when the Japanese attacked the export quality issue by creating the MITI, to ensure the level of poor-quality exports was kept low (…something the Chinese could have done, but found unnecessary as their export markets were found to be more than willing to buy ‘just good enough’ for a relative pittance. As stated, the PRC is very capable of quality production, but, like many here in the West, why bother if it sells profitably, anyway?).

      • Boatrash1 says:

        agreed many things can be hit or miss, but you are rolling the dice. In the US shipping fleet (including tugs,barges, oilfield supply vessels) many US vessels are having to complete extensive shipyard overhauls on SS tanks that were completed using Chinese made stainless steel. There have been multiple cases of a new (to me anyway) bacteria that eats Stainless Steel and turns it into Swiss cheese in just a few years. My vessel had to complete a major 4 month shipyard to replace entire sets of tanks due to the poor grade of this SS. These are jones act vessels “made” here in the US. The initial savings ended up being a whole lot more expensive in the long run.

        • joe2 says:

          Fascinating. Do you have any references on stainless steel eating bacteria? I can understand corrosion of fake alloys, ie no chromium. I have heard of this. I do incoming inspection but my requirements are not really stringent or critical value or high volume.

          I agree that the more serious the consequences, the more careful and even paranoid, you have to be.

    • bulfinch says:

      Made in USA has to mean something, though. You can’t just conjure the genie as-needed. Germany and Japan ate our lunch ages ago, becoming the vanguard in design, R&D and quality control for durable and industrial goods manufacture. We set the benchmark then walked the hell away from it…and maybe you just can’t unround some of those bends.

      • Question Everything says:

        Until people can admit these things, we’ll keep falling behind. People have too much pride and the attitude is even promoted. The pride and not looking at what we can do better is what is holding us back. I agree with what you said. I’d go on and write about what sort of products are typically the ones made in the U.S. and quality differences and other tangents like “MADE IN THE USA ……with global materials” prideful stickers on hot garbage or even the silliest things to have pride in being made in the U.S.A. like a wood spoon or something and not an electrical inverter.

        • Brant Lee says:

          There is a difference in quality when a COMPANY specializes in a product like in the early 20th century. A lot of that stuff is still around and in fact, prized, such as tools.

          Along comes a CORPORATION that buys out the place, fires experienced laborers, and sends production overseas. They ride the coattails of the product name for years. All that matters is the quarterly report for their stock.

          Chevy and Ford have ridden their name that was quality pre-1970 until the junk it is now.

        • Flea says:

          Speed Queen still made here ,higher priced but good quality

        • Shiloh1 says:

          Invented and perfected in large tents in Bentonville, Arkansas about 30 years ago.

        • El Katz says:

          Like Craftsman tools?

        • Wolf Richter says:

          For example: The majority of cars and trucks sold in the US are assembled in a factory in the US. All major foreign brands have assembly plants in the US, including BMW and Mercedes. Hondas built in the US have among the highest US content. Tesla makes vehicles in the US including for export.

          This “nothing is made in the US anymore” is BS.

    • vecchio gatto veloce says:


      Here’s a tale of two companies that make audio gear.

      First, is Outlaw Audio, LLC, Easton, MA USA. Founded in 1999. On the back of their $1,000 stereo receiver, it says: Designed in the USA. Made in China.

      Second, is Schiit Audio, Valencia, California & Corpus Christi, Texas. Founded in 2010. “We design and produce all our stuff here in the USA, with the vast majority of parts cost going to US-based companies manufacturing in the US. We need clarification in there because some people have played games with what “Assembled in USA” means. When we say it, it means that our chassis guys are right over the hill in the San Fernando Valley, our transformers are made here in California, our boards come from the east coast (of the USA), and we design, assemble, and test everything here in Valencia, California.” “Built in California and Texas.”

      But these two companies are symbols for how it’s done in the audio business. Many of the premier brands of high-end audio gear do not make their products where the company originated in, and that’s worldwide. It’s cheaper to make gear in China than it is in England. It’s cheaper to make gear in Malaysia than it is in Japan.

      Outlaw Audio has made their choice. I made my choice too. My gear is made in the USA.

      • joe2 says:

        My speakers are Dahlquists, the big ones, made 70s? I got them by accident in a RE repo. Still like them. My big amp temps out before the speakers show any distortion.

        So, yeah, when the company is focused on performance, function, and perfection instead of style and money, the US can beat anyone.

        We need to get back to that and dump the MBAs.

        • rick m says:

          Klipsch Fortes, ADS speakers, marantz tube amplifiers and Hickok tube testers all USA. But I love my Sansui 9090db receiver and my eight vintage Japanese turntables. Many cartridges from many countries.
          My brother upgrades new Chinese brewing systems for US customers. The export quality is improving now. He’s getting out of residential electrical service work because of excessive municipal regulations and materials shortages.

      • SoCalBeachDude says:

        I wouldn’t even consider buying ANY product made in the US except as a very poor choice last resort if necessary.

        • Wolf Richter says:

          The BMW X3, X4, X5, X6, and the X7 are made in the US. From your prior comments, I seem to remember that you’re a 5-series owner. So just an FYI, in case you decide to go SUV. If you do, you’re going to have to switch to a different brand. I hear that the Buick Envision is OK-ish, so you might want to consider that; it’s made in China.

      • MM says:

        Plenty of pro audio gear is made outside the USA.

        The Allen & Heath digital console I run for my audio job says made in UK on it. My JBL line array system has made in Mexico on the amps, and my DBX processors say *gasp* made in China on them.

        These are touring-grade audio products designed to work reliably at every show.

        • vecchio gatto veloce says:

          The Outlaw Audio receiver is very well regarded. It has an HD tuner, separate pre-amp output & main-in input if those are desired (for my system with active high and low-pass crossovers, it’s needed), and a high current main amp that can handle low-impedance loudspeakers.

          My Minnesota-made Magnepans are some of the most difficult speakers to drive. I debated getting the Outlaw, but couldn’t reconcile having it in my living room because of where it was made.

          Love having Schiit for my DAC, pre & power amps.

        • MM says:

          Oh I’m sure its a great sounding system. No disrespect intended.

          But I run shows for a living, and most if not all of the gear I depend on for my job is made outside USA. Doesn’t make a lick of difference.

          Off topic but what do you mean by difficult to drive? High or low impedence? I find 8 ohm boxes difficult to drive bc you need a lot more power for the same output, although it doesn’t stress the amp much. I avoid 8 ohm boxes for this reason – except subs, which you can wire in parallel to present a 4 ohm load to the amp.

        • vecchio gatto veloce says:


          Maggies have a fairly flat impedance/frequency curve. Rated at 4 Ohm, but actually have well under 3 Ohms at the crossover point frequency. Mine are ten year-old 2-way MG-12s. I run them with JL Audio subs, made in Florida, that are crossed over at 80Hz. Very accurate sound for all types of music and movies.

          An example of hard to drive, is the newer 3-Way Magnepan 3.7i. It has an impedance of 2.32 Ohms @ 650 Hz and 2.67 Ohms @ 8 kHz.

          Plus, Maggies are not efficient at 86dB/2.83v, 1 meter @ 500Hz.

          A bit of techno-jargon in my reply, but I hope that answers MM’s question.

    • Roger Pedactor says:

      CNYUSD is what to watch here.
      China’s debt situation is worse than the US. In fact, it may be worse than any country on Earth. They have a bunch of IOU’s from resource-rich basketcases in South America and Africa, entire unoccupied cities, 20% unemployment for recent college grads, and a demographic timebomb.

      They are also ensnared in a debt vortex issues against their own US-based debt with rates still rising. Everything going on is fascinating to watch unfold. Big Eurozone manufacturers with US footprints are expanding here, especially in Right to Work states. The healthcare cost issues of the U.S. are subsidizing social healthcare programs abroad.

      Yellen’s comment about the end of the USD as GRC was loaded. Because the goal is to make the US a net exporter ahead of just oil and energy. Which means long DXY.

      If Congress fixes immigration, watch out. If they don’t, inflation will re-accelerate. There isn’t enough labor and US birth rates are too low.

      • joe2 says:

        Everyone is always on the edge of collapse. That, or stagnating. One thing to keep in mind is national character, perseverance, and grit. The Chinese have a strong sense of nationalism and pride regardless of what the government is. I know the US used to. Does it still have the pride and unity it had? Seems it is being tested.

        Will everyone sacrifice and pull together like the Koreans did during their financial crisis by donating their gold jewelry to the common good? Or fragment into rioting?

  9. SpencerG says:

    What? You mean we are no longer going to view China as some kind of “partner” any more? The Horror…

    • Miller says:

      It isn’t decoupling though, again–starting to see how even savvy investors get bamboozled by bad information and wind up as bagholders so often (including us, we’ll fully admit it). The data and good articles like Wolf’s show one thing but the interpretations go overboard and read in something that isn’t there. We are re-shoring a lot of things and rebuilding a lot of our manufacturing base in some main areas, as is rest of the world–that’s a good thing because it means we have a more reliable supply chain that won’t be disrupted by shocks like pandemics. That means less supply shocks and less inflation, now and in general. Again, that’s a good thing.

      That’s not the same thing as decoupling, the new manufacturing also means more orders for both raw and finished and specialized goods for the new processes, depending on price points and needs. That means in fact we’re also buying a lot more from other countries including China, and they’re also buying more from us–so in reality more partnerships, not less. The April trade deficit was in fact way up, esp for goods, and still high in May partially because of this. But that’s more than balanced by the benefits of having a more solid supply chain with much less vulnerability to shocks and inflation. Other than long overdue interest rates hikes and QT (and maybe removing some needless tariffs that don’t really help us), this is probably the most important step to reducing inflation and keeping it down, for us and in general.

    • Flea says:

      China was never our partner there COMMUNISTS ,teach there kids to hate USA .Wake Up

      • SoCalBeachDude says:

        The People’s Republic of China is interested in trade with the US and all other countries of the world as it is in their mutual interests to do so and form friendships around the world with investments and engagement. The PRC does not ‘hate’ the US at all and it is obvious that you have never been in the PRC. Take a trip there.

      • Jana D says:

        SoCalBeachDude is right. That’s nonsense. I’ve lived here 20 years. They don’t hate USA. They think you are a little nuts, but there’s no hate. Now, does the American government teach you to hate China? Hmmmmm. Maybe let’s drop all this hate stuff and just trade, trade, trade.

        • 91B20 1stCav (AUS) says:

          Jana – sometimes I think the ol’ ‘Murican snake of directed fear and loathing gets frustrated by it’s citizen’s normal ignorance of the rest of the world and is turned on its own tail…

          may we all find a better day.

  10. R2D2 says:

    If tech-supply chains quit China thru 2030, then India is likely to be the biggest gainer, not the US.

    • Miller says:

      Tech-supply chains aren’t quitting China at all, there’s a lot of misunderstanding of the data here. There’s been a lot of re-shoring of manufacturing to the US yes, that’s a good thing to provide better supply chains that are more resistant to supply shocks like pandemics. That helps to bring down inflation, and that’s happening all over the world, not just here. But that’s not the same thing as decoupling or quitting, they’re still the biggest trading partner for most of the world and those numbers are going up, including with us.

      As for India, although there are opportunities, from our recent visits there, India is still limited in its capabilities largely due to population pressures, which hinders what it can do with manufacturing and infrastructure. India can be frustrating because it has a lot of potential, but with such overpopulation and crowding, they have to dedicate so many resources to crowded areas and migrating populations that any new infrastructure is rapidly strained to the limit, and too many resources in society have to be set aside to care for the throngs of people moving around. The only way for India to become more of a manufacturing hub is to get its population under control faster, with the classic demographic dividend that allows for a less strained infrastructure needed for mass goods production. It is getting there and India’s birth rate recently fell way below replacement, but it still has a huge youth bulge, so the question is whether the population growth will stabilize fast enough to yield the dividend and make it possible for India to re-dedicate a lot of its resources and infrastructure to production.

      • Cas127 says:

        Beyond India, there is Vietnam (100 million population), Phillippines (100 million), Indonesia (200 million+)…China has shown what can be accomplished very, very quickly…but foreign investors were stupid and shortsighted to focus on China exclusively.

        • tolkapiam says:

          Thailand (75 million ) is a hub of all japanese companies auto production in East Asia . Suzuki;s global top production and export centre (south asia/middle east/africa/ latin america) is India

      • Kevin W says:

        I live in China and do business in both places. I doubt India will catch up to China in my lifetime. Their logistics are third-world for lots of reasons that they’ve explained to me, and–this may change; it did with China–foreign executives are really reluctant to go there.

        For low-end manufacturing (textiles, plastic goods, toys) China is already hollowing out, with mfg moving to India, Thailand, VN, Laos, Africa. But unless you’ve seen the differences up close, it’s hard to see how far the trend can possibly go. Port facilities and overland transportation in China are truly world-class. That keeps transport costs low.

        The things China does lack are natural resources and energy, but the other SE Asian and subcontinent countries lack those things as well.

        Complex issues here, no doubt. Good comment.

      • Antonym says:

        India is overcrowded in Mumbai and Delhi yes, but has huge swaths of land with low population density. For huge un-educated youth bulges look at Pakistan or African countries.
        China used to be favored for its large young workforce by the way. Indian are good in manufacturing, they just have to learn working with high temp / nano materials.

    • gametv says:

      vietnam is a big winner already

  11. spencer says:

    A rise in prices, if not too rapid and extreme, has a stimulating effect on business profit expectations. Acting under the impulse that wider profit margins are in the offing, businesses will go into debt, hire workers, buy additional inventory, expand their rate of operations, [and if their optimistic anticipations cover a long enough period], decide to expand their plant capacity, and develop new outlets for their products.

  12. joe2 says:

    Well building manufacturing plants is part of the solution. But manufacturing needs processed materials so where are the plants for materials refinement? And that begs the question on availability of raw materials. China just closed exports of germanium and gallium and controls 95% of rare earth production.

    How many years does it take to get EPA, NIMBY, and ECO Warrior approval for a mine in the US?

    Anybody think this stuff through? Raytheon CEO says it’s “impossible” to decouple from China. “There is no alternative,” he said.

    BTW, China has sanctioned him.

    • Miller says:

      Yeah Hayes made a lot of good points here, there’s just too much fantasy talk about “decoupling” and it goes nowhere, leading to a lot of bad policy and wasted time and effort. There is absolutely a lot of de-globalization and re-shoring to strengthen supply chains, that’s a good thing to lower inflation, but that’s same as decoupling or de-risking or whatever the fancy word is. Von der Leyen and the German government tried to peddle the same thing for a while but all the German companies basically just laughed them out of the room, both as customers and even now as parts of the manufacturing process, there’s still no realistic way to “decouple” without wrecking the home economy, and the same goes for us. The export restrictions on chips predictably have been a disaster, they’ve deprived Intel and Micron of some of their most important overseas markets while encouraging countries overseas to do all of their own fabrication and develop industries they were previously happy to buy from us on before. Decoupling was never realistic and it’s even less now, obviously re-shoring generally is a different thing and as far as helping insulate against supply shocks and prevent inflation, is totally a good thing.

      • Miller says:

        ” but that’s not the same as decoupling or de-risking or whatever the fancy word is”

        damn, already getting tired eyes, thank goodness the holiday tomorrow..

  13. fred flintstone says:

    Well…..although I am no expert……Sweden just announced a huge discovery of rare earths in their northern province area…….the same Sweden we are sweating bullets to get admitted to NATO……or in other words under our direct protection umbrella……sort of like when the Godfather agrees to protect a local flower shop as long as for the rest of time flowers for all his events are……well…
    As for the amount of construction…..if AI gets rid of the labor component……whats to stop all manufacturing from relocation to the US.
    …….a recession……good luck with that.
    As for the deficits…….if a lot of building is happening here and ends up competitive…..the deficits melt away……
    How do the folks at the bottom without common stock ownership exist without jobs (taken by AI) and the companies need someone with cash to sell stuff to……a lot more free this and free that…… or a much higher standard of living due to higher wages. Number 2 is much better. Who wants a lazy generation. Sort of like the Henry Ford 5$ per day solution for who buys all those cars pouring off his assembly lines.
    We go back to being isolationist because we don’t need them and they don’t mess with us because only a moron would…….well…. Hitler, Musso and Tojo must have flunked third grade.
    …….and they wonder why the stock market is jumping.
    but……sometimes the future looks grand but tomorrow…..full of troubles.
    OK……I’ll stop drinking for the night.

    • joe2 says:

      No no, don’t stop. You are doing great.

      There is usually a middle ground between the worst and best. Diversify and navigate.

      Damn, I sound like the banks funding both sides in the war.

    • Nick Kelly says:

      The Swedish impulse to join NATO originates in Sweden, a pure common sense reaction to Russia’s invasion. As does the Finnish, now admitted. The Finns fought a war with the USSR just before WWII, but until recently had fairly good relations. Now tightening their border.

  14. duane says:

    Headline from another website, “TSMC to Bring 500+ More Migrant Workers to Arizona”, this as TSMC is getting $15B in US taxpayer grants to build their plant in AZ.
    Furthermore, Corporate America incinerates $1T annually in share buybacks, far exceeding this construction program which is partially funded by US taxpayers.

    • Miller says:

      Agreed, this is the problem with so many of these corporate giveaways from government programs. Just like we say with PPP, there’s never enough oversight and the government cheese winds up being squirreled away into corruption and artificially pumped profits. Already looking like a lot of the infrastructure bill, Chips act and inflation reduction act are shaping up like PPP part 2, with similar “diversions” of the funds

      • Question Everything says:


        • Wolf Richter says:

          duane et al,

          You cited a headline that is clickbait BS designed to get morons exited. The article that you cited had cited the Nikkei, and the Nikkei said this:

          “Taiwan Semiconductor Manufacturing Co. and its suppliers plan to send several hundred additional workers from Taiwan to Arizona in order to speed up construction of its first chip plant in the U.S. in more than two decades, sources briefed on the matter told Nikkei Asia.

          “Construction of the plant has already fallen behind schedule due to labor shortages and other factors, and TSMC, the world’s largest contract chipmaker, has admitted construction costs have exceeded expectations.”

          You see, chip plants are not easy to build. It’s not just putting up some tilt-up concrete walls — that’s easy to do. You have to build and equip the actual plant inside that makes the chips. Building chip plants is an expensive complex specialty expertise, which is why they cost so much.

          The biggest BS comments get the biggest replies because people love BS above everything.

        • Franz Beckenbauer says:

          That is exactly right. Chip manufacturing plants are tricky, and they need a lot of Infrastructure (cheap electricity, wafer production, Inputs like special gases) around them. Which is why 15 billion dollars spent in the whole of the US for building manufacturing plants in absolute Terms amounts to a little more than nothing. If that continues, it’s a different picture. But i guess since gubment subsidies are paid when construction starts (to get the most bang going into election year – just a coincidence, of course), i would not hold my breath waiting for that.

    • JimL says:

      What website? Many websites are suspect because their intentions are both to inform, but to instead invoke a reaction even if it is misleading.

      A semiconductor fabrication plant has very few jobs that unskilled migrant workers can do.

      Also, buybacks do not incinerate money. That is just populist BS. It can be very complicated to determine who benefits from buybacks, but someone always benefits. The money is not incinerated.

  15. Mike R. says:

    More deficit spending. Biden pushed through the “Chips and Science Act”. 40 billion towards new chip plants in the US. And then there is the “Inflation Reduction Act”; hundreds of billions more.

    If the US actually had to earn/pay for what it spends, we’d be screwed.

  16. Whitten says:


  17. Little Boy John says:

    There is an extreme difference in Reactive Leadership and Strategic Leadership. US Federal, State, and Local Governments all operate from reactionary impulse. Covid exposed how vulnerable we really are, and how US based companies don’t actually control their supply chains in communist countries. Hello Shock and Awe, running from China to India will have the same results. I worked for the largest private grain company in the world and they just walked away from assets in Ukraine, the bottom is quietly falling out behind closed doors.

    • Question Everything says:

      Some people need to hear what you said. People must like to repeat their mistakes.

    • longstreet says:

      The “trade deficits don’t matter” crowd, the academics that push the idea are to blame for our loss of manufacturing. They say the consumer benefits and the dollars “must return”.
      BUT…..Deficits DO MATTER.
      For with the return of those dollars comes “a power” for the holders of those dollars, usually ending with the acquiring of ownership or control. Plus, the consumer of foreign made goods becomes reliant on that production.
      Losing power, losing ownership, losing manufacturing capabilities, and becoming reliant on foreign sources are the costs of trade deficits. The academics seem to miss these points, for they live in a “globalist mindset” and seem oblivious to the history and likelihood of global conflicts.

  18. Doctor_ECE_Prof says:

    My own favorite line on this topic is, “If I have to live on American made products and American services, I might as well live in a Tepee. At age 73, I guess I can do that! (Well, having said that, I realize I am hiding in my house (first year at Tucson) under the comfort of AC blasting 24 hours a day @110 degrees outside.)” Are we not already seeing that via te sticky inflation?
    Let us see how long this (de-globalization) lasts. I realize we are trying to groom India to replace China. I have my doubts on that (they are the officer class, AKA paper pushers, groomed by GB before for that task and not for real hands on work).

  19. SocalJimObjects says:

    Plenty of bullish people out there it seems. I mean we don’t know how these were financed, 0%, 3% or 5%? Making capital investment when rates are still going up might turn out to be a foolish choice in the end.

    • Wolf Richter says:

      The worst decisions are made during the era of free money — as we can see. Higher capital costs impose discipline, which is a good thing.

      • Occam says:

        The Fed and Congress have lost discipline because the Fed’s cost of capital (and therefore the government’s) is zero; it can create as many dollars as it wants out of thin air. The Covid spending frenzy, the CHIPS Act, the “Inflation Reduction Act”, social welfare and defense commitments and resulting multi-trillion dollar deficits mean that it’s really different this time. Discipline won’t be restored internally by economic contraction, purging of malinvestment and/or reduced federal spending because the majority of the American population (and therefore the Fed and Congress) won’t stand for it. Figuring out how best to respond to that reality is the big economic question for Americans (and everyone else).

        • Sams says:

          The cost of creating more money is monetary inflation. Then this propagate to assets, commodities and consumer products. The end result is CPI «inflation». It just take some time.

      • Bs ini says:

        Great point Wolf! ZIRP is a horrible way to allocate capital. Very inefficient .

      • longstreet says:

        “The worst decisions are made during the era of free money”
        The bond department at Silicon Valley Bank can attest to that.
        Also, a limit on the insured amount of a deposit is a type of “market discipline”…but was cast aside by Yellen, a landmark decision never to be reversed, IMO.

      • Flea says:

        Wolf happy 4 th of July ,but as I call it Independence Day .We the People are starting to wake up

  20. vecchio gatto veloce says:


    Three years ago, what is happening in France happened in my city and it was not just local residents who rioted, looted and burned down buildings. Many of the “protestors” were from out of town and out of state.

    My post office that was burned down, 55406, has just been rebuilt and reopened. The 3rd precinct of the MPD still doesn’t have a permanent headquarters after its building was destroyed.

    In the immediate few evenings after the shit started, my neighbor across the street and I stayed up all night long, armed and ready to protect the neighborhood. Yeah, it’s 2;00 am, and a I’m packin’ a couple 1911s while on the full alert outside my house. Things like that stay with a guy for while, you know.

    South Minneapolis. A bit west of the Mississippi river. One never knows when and where shit might go down.

    • Oof Yikes says:

      The both of you are deeply paranoid and a danger to those around you.

    • longstreet says:

      “Many of the “protestors” were from out of town and out of state.”

      I always wondered what happened to the “crossing state lines to incite a riot” federal law. Seems it has been intentionally disregarded, and one might suspect for a reason.

  21. tolkapiam says:

    I want to talk about inflation at the consumer end .
    Auto insurance is highly over priced.
    Pharma is a racket due to insurance co / import approval by FDA authorities nexus and by overcharging everything by 1000%
    Iam from Asia lived in Hong kong for a long time up to 1997 and lived in LA for 4-5 years and driven all over usa.
    just to get an idea of MRP of any drug in India ( I get 20% discount in online pharma door delivery ) of any of your medicine (core ingradient ) ,just type ” 1mg dot com”. you will see all brands available from cheapest to costliest. ($=82 ₹) In export of any formulation US FDA approved Indian pharma companies will sell at 60% off from Indian MRP for export to usa.
    just approximation a pill costs 5-10 cents in India is 1-3$ in usa . Pharma formulation manufacturing in India is the most competitive globally (with FDA approved manufacturing factories (china does not recogonise FDA hegemony but they are the leaders in core ingradients price wise globally), core ingradient somes times imported from china)
    layers and layers middle managemnt and admin via insuarnce racketeers has made cost of treatment /hospitalisation /insurance prohibitive in USA which hurts the poor & middle class.

    • JimL says:

      Huh? How is auto insurance overpriced? Auto insurance is one of the most competitive marketplaces in existence. Any overpricing by competitors will be undercut right away. Especially since the market is short term and resets every 6 months (or sooner).

      The price increases you are seeing in auto insurance reflects the increase in the price of the underlying product (autos) and the fact that there is no such thing as a cheap auto repair. Everything is computerized and whole modules need to be replaced.

      In the past a low speed impact would require the replacement of a bumper or minor fender bodywork. Nowadays those bumpers contain airbag inpact sensors, cameras, possibly radar, etc.

      Auto insurers are both overpricing their products.

      • longstreet says:

        “Auto insurance is highly over priced.”
        Stopping car jacking might be a step in the right direction. Mandatory jail time.

        • El Katz says:

          More to it than carjacking.

          Some volume brands failed to install anti-theft features in their products so they can be stolen with a USB cable. Thefts skyrocketed.

          Alloy panels. To repair a minor dent in a tailgate/rear quarter of a Rivian pickup is about $37K according to one estimate I saw because it’s a unibody pickup, the rear cab glass and tailgate is “one time use”, and it appeared that the inner bed wall was integral with the outer panel, requiring the whole enchilada to be cut out and tossed. Tesla’s are often scrapped because there are few auto body shops that can repair aluminum. Ford’s pickup beds are also aluminum. Hoods on some Honda’s are aluminum. Some cars have aluminum space frames and subframes that can’t be straightened with traditional measures.

          Catalytic converter thefts are another issue.

          Lots of reasons….. A year ago, spousal unit got clipped in an intersection. No damage to the frame, suspension, cooling system or any other mechanical component. Damage was confined to the tip of the left front fender, headlight. and the plastic bumper cover and sundry sensors. The cost to repair? $9,700 for damage that once could have been repaired on a driveway for a few hundred bucks. The headlight alone was $1,100 in the box. A wiring harness about 4 feet long was $180 because it could be (none available as made in Ukraine so I paid whatever it took to get it).

        • longstreet says:


          Agreed. The complications of new cars, the electronics….the over doing of “gimmicks” (IMO) make small incidents big deals.
          The really unnecessary bells and whistles … duplications and truly unneeded features have hit the outer bounds.
          Imagine an EV accident …with all that electricity coursing through the vehicle. I have been told the “jaws of life” can not be used on an EV. And we still dont know what a 7 year old Tesla is worth (new battery pack and disposal fee)
          Agree on the catalytic thefts.
          Parking a car in a hotel/motel parking lot is a real risk.

      • phillip jeffreys says:

        Wait a sec. The cost of insurance should reflect the factors you present (replacement and labor costs) but also the probability of an accident given driver metadata. That’s the numbers game in play.

        I just had my auto insurance jacked a hair short of $1k a year. Wife and I are insured: we drive maybe 50 mi/week; garaged cars; no tickets in several years; live in non-flood plane area with current hurricane protections (FL). I called the insurer and was told: inflation, hurricane Ian, staying price competitive in the state. Well, I didn’t build my home/driveway/garage on a sandbar susceptible to bad weather, have not changed driving habits, and own cars circa 2008/2009. The insurer already had the lowest rates in the state – so they redefined competitive to mean “same as the other guys.” Rumor mill has it the insurer wants to get out fo the state.

        A thousand bucks? BS.

  22. JimL says:


    I hope you are being intentionally funny. It is unfortunate that there is a decent chance toy aren’t trying to be funny and instead are being serious. I have come to realize that the American voter isn’t as informed as they should be.

    • Flashman says:

      The American voter has reached the conclusion that no one in their right mind runs for office. All the unelected persons and financial backers set policy and is another form of voter fraud.

  23. Kevin W says:

    Greetings from China, which is the focus of much of the re-shoring and friend-shoring construction spending. And kudos to most of the commenters above. Good discussion, as usual.

    It’s doubtless good for the US to be bringing a lot of the manufacturing back home, yet in a nuts-and-bolts way some of the developments don’t make a lot of sense. Putting water-intensive projects in the Arizona desert is one; another is the question of whether the China government will idly sit by and watch high-end manufacturing drift away, whilst still allowing their rare-earth metals to be used by factories that have relocated.

    Two years before the pandemic, Hurricane Maria swept through Puerto Rico and knocked some factories off line, and five minutes later the US and Canada were running out of IV bags. I was surprised why that wasn’t a wake-up call as to how the McKinsey-ization of US industry has just screwed up everything: an IV bag is literally a plastic bag filled with salt water, but nobody knew how to make the things outside PR. How did that happen?

    Two years later the COVID pandemic hit, and we learned that 99% of many of the drugs used in US hospitals are made on the other side of the ocean, and that no US factories made gloves or protection gear.

    I get that just-in-time inventory management can work for a Toyota factory, which doesn’t want to stock more mufflers or windshield wipers than they’ll need in the next three days of production, especially since the Tier-2 factory that makes the mufflers is down the street. What I don’t get is why hospital systems decided that is the best practice for IV bags and cancer drugs.

    It’s a great first step, to incentivize companies (further) to shorten their supply chains, and bring them closer to the consumers. There’s a lot of other stuff that needs to be fixed, too.

  24. longstreet says:

    Self sufficiency is a good thing….especially during a war.

    As China restricts the exporting of metals used in chip making.
    It was discussed in Congressional testimony with the Energy Secretary that 20% of the nuclear material used for our nuclear aircraft carries comes from Russia.
    Even Adam Smith said that industry critical to the survival of a nation should be defended by the host country. That lesson has been lost on the money hungry politicians and lobbyists in Washington DC who play ball with countries who are not our friends.

    • phillip jeffreys says:

      It goes in circles.

      The US coordinated sanctions against China vis export of advanced chip-manufacturing capabilities needed to achieve 2-3 angstrom transistor densities – the “stuff” that goes into next gen type weapon systems.

      2024 Taiwan elections should be illuminating.

  25. Carlos Leiro says:

    Wolf Help me. I read:
    “The health of the US manufacturing sector took a sharp turn for the worse in June, adding to concerns over the economy potentially slipping into recession in the second half of the year.

    Factory output declined sharply at the end of the second quarter, according to the S&P Global PMI, dropping at one of the fastest rates seen over the past 13 years.”

    • Wolf Richter says:

      I posted the chart in the article. READ THE ARTICLE AND LOOK AT THE CHART before you post BS.

      The chart in my article is actual “real output.” Meaning actual production adjusted for inflation.

      What you cited is another thing, and I guess what S&P global was talking about is the ISM PMI survey of some executives. I already replied to it in the comments of the prior article. If you read BS somewhere else, don’t drag it into here. This is what I said above about it:

      1. The ISM index contracts a lot, recession and no recession (below 50 = contraction).

      2. And it contracted down from its historic biggest-ever manufacturing bubble…

      3. This is month to month, executives are asked how was June in relationship to May. So when you come off this huge bubble, you have these dips month after month as you step down from the bubble, because effectively, you’re returning to normal in monthly increments:

      • Carlos Leiro says:

        Wolf In the first place I did not put anywhere that this information was the REAL and ABSOLUTE TRUTH. That’s exactly why I asked you.
        Secondly, I take this space that you give us to ask and learn.
        If it annoys you that one asks questions, it seems to me that it does not take advantage of your space, precisely you write with sources and I read many things from different sources.
        I also believe that many of the principles of economics that economists give off as laws are BS.
        I have surely said a lot of BS in my life and will continue to do so.
        Haven’t you ever said BS, you’re infallible, you never had to redo a statement.
        If I don’t know or find any information I ask, and that’s what I did.
        You treat me as if I treated you in the same way, as if I wanted to dispute your information in any way possible.
        I do believe that there are many interests when statistics and numbers are put into play in the economy, the media, everyone, even the specialized media use these numbers to influence opinions.
        I prefer to sin by insistence than to be left with doubts, I prefer to inquire than to be left with different information on the same topic.

        • Wolf Richter says:

          Since when is it my job to debunk every friggin’ headline out there? There are a gazillion of the headlines. Everyone is trying to get clicks. But every debunk takes time away from writing an article. I could probably write an additional article per day if I didn’t have to debunk all this stuff that people drag into here. If you read it somewhere else, it stays somewhere else.

  26. Swamp Creature says:

    I purchase a lot of bird food for my backyard wild bird feeders. I checked the labels on the packages recently. Guess what. Much of the bird food sold in bird shops is Made in China. That’s a disgrace.

    • Harvey Mushman says:

      Their food is for the birds!

      • 91B20 1stCav (AUS) says:

        …wasn’t that long ago, when Paul Theroux commented on the seeming dearth of birds and other wildlife in China (‘Riding the Iron Rooster’, depicting his rail travels there after the ‘reopening’ to foreign travelers).

        may we all find a better day.

      • Ccat says:

        polymath? we have software for that now. And what we dont have, we can write. The need for brute force math is just about over. You can code the algorithms from math books and let the logic machine (computer) do its thing automatically. Been there done that.

        • 91B20 1stCav (AUS) says:

          Ccat – ??? (…a misfire in the ‘reply’ function, perhaps? Lawd knows I’ve made more than my share…).

          may we all find a better day.

        • phillip jeffreys says:

          Maybe. I’ve done it too. Of course, one has to assume the coder understands higher math (or that the reviewers/tester do) – or, which isn’t usually the case, how complex neural networks (for example) actually work. Lest we forget, the underlying mechanics in all of this (the stats, predictive analytics, etc.) deals with uncertainty/randomness and complexity. So, where does risk head in all of this?

          I’ve also supported various orgs working cybersecurity. No way the inherent complexity and vulnerabilities ever disappear. They simply change.

          Every system-of-system has vulnerabilities. AI won’t be any different. So, the calculus changes.

  27. Augustus Frost says:

    “An investment boom in US factories is a welcome turn of events because “real” manufacturing output – adjusted for price increases – has been roughly flat for 17 years, amid rampant offshoring and globalization of supply chains by US companies, the very thing that then got these companies tangled up in chaos in 2020 and 2021.”

    Agree, but it’s more than that.

    Ultimately, the prosperity of any economy and society primarily depends upon producing real things, not financialization and discretionary services. For reasons publicly stated, it also makes the country vulnerable to potential economic ransom when it cannot produce vital goods.

    The US services trade balance has recently shrunk to about zero or isn’t far from it. Longer term, other countries are going to be able to provide comparable services where they don’t now at lower wages which American cannot currently match meaning lower living standards for Americans. The US cannot use the USD as global reserve currency to consume above production forever.

    • Wolf Richter says:

      In terms of consumers (not industrial users): When you look at where your money goes, you realize that you can buy only so many manufactured goods. How many cars do you need (majority of cars sold in the US are assembled in the US)? How many laptops? How many curtains and shades and bathtubs? At some point, you have all the things you need, and you only replace what’s broken or to get a more modern thing.

      You also keep buying food and gasoline, both of which are mostly made in the US (the US is a big exporter of both). And then the rest of your spending goes to services: traveling (hotels, flights, cruises, other transportation) music, movies, sport events, gambling, concerts, subscriptions, restaurant meals, electricity, broadband, software, healthcare services, insurance, etc. Most of the services sold in the US are produced in the US.

      That’s the problem with manufactured goods: demand is limited. Once everyone has all this stuff and is loaded up to the gills with it, you have to count on the “replacement cycle,” meaning get consumers to throw out what they bought and replace it with something newer.

      “The US services trade balance has recently shrunk to about zero or isn’t far from it.”

      Nope. But the services surplus has moved sideways and even dipped a little during the pandemic because of: one of the largest imported services is Americans spending their money traveling overseas; and one of the largest exports of services is foreign tourists spending their money in the US. Both of them gut crushed during the pandemic, and tourists from China (formerly the largest group of tourist) came to a near halt because of their covid-zero policies. Travel in all directions by all is now resurging.

      Here is more detail on this:

  28. danf51 says:

    The new manufacturing will require a big boost in the output of engineers. If anybody in the US were smart, they would be setting up community college programs to produce “Mechanics” – not like car mechanics, but a course like what shop classes used to be like, but updated to teach basic numerology, numerically controlled tools, basic electricity and mechanics.

    Mainstream engineering educators seem to pride themselves in how many students they can drive out of the programs.

    All of those new factories are going to find that American workers don’t fit and most companies these days are not willing to train.

    • 91B20 1stCav (AUS) says:

      df51 – and remembering the current dilemma of differences between a ‘mechanic’ and a ‘parts changer’ …

      may we all find a better day.

    • Nick Kelly says:

      Not to make fun about yr good ideas but by ‘numerology’ you mean basic math.
      ‘Numerology’ refers to an odd superstition/ cult about numbers: 7 good, 13 bad type of junk.

      Moving on, what you are asking for first requires basic literacy: can the person read the manual?

      Next could be a high school, or maybe junior high, ‘How Things Work’ course in which basic electricity etc. is explained. I would say less than half adult males know the diff between AC and DC, and why we need AC on which our tech world depends. This ‘half’ drops for under 40’s and a lot more for females.

      The exasperating thing is how simple it is to explain.
      It most certainly does not need algebra let alone calculus.

      • 91B20 1stCav (AUS) says:

        Nick – sadly, at this point in time (mebbe ANY point in time), a lot of folks appear to prefer ‘numerology’ to ‘how things work’ (…mebbe time to reread Pirsig…).

        may we all find a better day.

        • vecchio gatto veloce says:

          91B20 1stCav (AUS),

          Bob lived across the street from me, and a few houses to the north for quite a few years. When I rode my brand new 2002 Kawi ZRX 1200 down the street one day in spring 2002, Bob stopped me to ask about it. That’s when I learned that he was the author of the book of Zen. Cool dude.

          Bob would be proud that when I got my 2019 Italian ‘Thunder’ in spring 2020, I had three choices for a rear wheel stand. I could buy one for $50 that was made in China; I could buy one made in the USA for $130; or I could weld one up in my basement’s metal shop for $40 total cost in parts.

          “Made in South Minneapolis.”

        • Wolf Richter says:

          vecchio gatto veloce’s rear-wheel stand:

        • 91B20 1stCav (AUS) says:

          DanRo – you are a truly fortunate man in your neighborhood acquaintances! (…and, by the looks of your swingarm stand-thanks Wolf!-and, no surprise, an old-tradition ‘Murican ‘Nation of Mechanics’ school adherent…). Best-

          may we all find a better day.

  29. George W says:

    Assembled and marketed in the US is not what I would consider manufactured in the US.

    The last Toyota that I owned was assembled in the US and yet all of the assembled parts were stamped made in Japan. Made in China, made in Mexico is also very prevalent.

    I can find plenty of bottled water products labeled proudly made in the USA.

    To me the most disturbing thing is how quickly China was able exceed the US as the manufacturing hub of the world. A nation of lawyers attempting to compete in a world full of engineers is not going to end well.

    Traveling on the backs of others is also not sustainable.

    Running to Congress looking for a solution every time a competitor shows up is not free market capitalism and needs to stop(IMO).

    • Swamp Creature says:

      George W

      At least your Toyota was assembled in the USA. The last car, a Nissan Sentra, I bought was assembled in Mexico, using parts manufactured in China and Japan. The car was a lemon. Luckily , I was able to put 175 miles on it and then gave it away to a charity.

      • Wolf Richter says:

        How old was the Sentra when you bought it?

        • Swamp Creature says:

          1 year old. It was a 2005 model. Had 10K miles on it when I bought it in 2006. Paid 12K. It rode great when I first bought it but over time the suspension got worse and injured my back riding on the bad roads in Washington DC. I had to get rid of it for that reason alone.

        • Wolf Richter says:

          Thank for clarifying that we’re witnessing ancient history here 🤣

  30. George W says:

    Money flows to where it is treated best.

    Remove housing and military spending from US manufacturing data and state of the US economy is considerably worse.

    The manufacturing state of the US economy doesn’t even come close to supporting the current housing nonsense that has occurred over the last 20 years. The housing market in the US is completly dependent on ever decreasing interest rates, nothing more.

    The US military industrial complex produces nothing economically productive even though it makes up a large portion of the manufacturing data being reported.

    US manufacturing decay is visible everywhere. What you see and smell when you get off that plane is what awaits your families economic future.

    • Harvey Mushman says:

      “The US military industrial complex produces nothing economically productive even though it makes up a large portion of the manufacturing data being reported.”

      You couldn’t be more wrong. Just look at your cell phone for example. All of the technology in it comes from US research (department of defense).

  31. Swamp Creature says:

    A million people came to Washington DC to watch the fireworks and listen to the music and artists. A record. The economy can’t be all that bad if this is the case. Even the last placed Nationals baseball team nearly filled the stadium. Real Estate has even picked up. We appraised a house the other day that had over 100 repairs outstanding before it could settle. The place sold anyway and the lender put out a loan on the property.

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