Construction spending on Manufacturing has plunged 32.6 percent in two years.
Tariffs did not and will not revitalize US manufacturing.
Historic Crossover
- The manufacturing boom that started in 2021 under Biden peaked in September of 2024. Spending on data centers and power prevented a collapse in nonresidential construction spending.
- In September 2025, construction spending on data centers and power eclipsed spending on manufacturing.
- In July 2026, the combined Data Centers Plus Power surged to $238,888 million, while Manufacturing plunged to $167,805 million.
- The downward slope of Manufacturing is nearly a mirror image of the upward trajectory of Data Centers Plus Power.
Construction Spending Details
Private Construction Spending in Millions
- Manufacturing: 167,805 (down 32.6 percent in two years)
- Power: 161,541 (about to eclipse manufacturing)
- Commercial: 116,241 (down 23.0 percent in three years)
- Data Centers: 75,166
- Data Centers Plus Power: 236,707
- Total: 238,888 (up 6.4 percent in two years)
Manufacturing Jobs vs Nonfarm Payrolls
Change in Manufacturing Employment
Manufacturing and Services Jobs Percent of Nonfarm Payrolls
Lost and Gone Forever
- 8-Track Tapes
- Cassettes
- CDs
- Farm jobs
- Manufacturing jobs
- Department store significance
Trump is not going to bring back any of those. Moreover, his tariffs and bashing of allies is going to cost manufacturing jobs.
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I sense that the gold price and the bond market are both anticipating another employment report disaster tomorrow.
And thus,
“All your rate hike are belong to us”.
Sometimes I wonder if all this data center crap isn’t a depression era work project like building lakes, etc to keep people busy. Keep hearing about this big AI bubble. Where would we be without this boom? Instead of something useful like lakes when it’s all said and done we’re going to end up with a bunch of huge buildings littering the countryside, no improvements etc. We’ll have to gut them for resources.
Who needs wasteful fripperies like healthcare, infrastructure, education or environmental protection? The Department Of War needs a trillion and a half!
Another broken promise. But why should Trump care? He already got what he wanted.
Billions, he got billions.
Protectionism is a good Idea, but has been poorly executed. It needs to be applied to specific industries, ideally critical ones first, along the supply chain of that industry, and that industry incubated until a good level of self sufficiency is achieved, and then replicated to other industries, one by one. It may take decades.
Using blunt blanket tariffs, particularly on raw materials always was too simple, but an easy sell to the electorate. I get the impression its more because of certain businesses lobbying for it than an actual desire to re-industrialize.
Ah, the ‘infant industry’ argument for corrective tariffs. Now we’re trying to resurrect that ideology from decades ago?
There is no way we can make stuff cheaper than third world nations. So all protection ism will do is make products made in the us more expensive for americans. Better to focus on free trade and export the things were good at.
Its not the 1950s anymore.
We can make better stuff.
Yes, Americans didn’t like Biden’s juggernaut economy so they traded in for Trump turdonomics. How do you suckers and losers like them turds?
Even Trump told us who runs the economy better. It was true then and true now.
https://www.youtube.com/watch?v=rRndMiVIB-w
The 2016 and 2024 elections were stolen.
Haha turdonomics.
Tariffs accomplish what could not be politically done: a tax hike on the poor. Also conveniently the failed (from the git-go legally) tariffs of last year accomplished a huge handover of unearned revenue to businesses, a net transfer of wealth to the haves (including shareholders). This made the poor-folks’ price inflation into a political graft.
What cannot be done politically is a tax hike on the rich.
That just leaves the Luigi Maneuver.
Praise Luigi.
If you can turn that into clicks, you are today’s influencer-entrepreneur, complete with female fans.
3 trillion in reserves and a downswing in manufacturing. Who would have thunk it.
Ever hear of the concept of causation?
Mish’s charts show construction spending flat from 2015-2020, then a huge rise of 3X through 2024 and now a return to still 2X what the pre-2020 construction numbers were.
“Reserves” were at $3T+ from 2020 on – before the massive increase and after the decrease started in construction spending.
Your ‘argument’ is BS
There’s no reason we can’t have American manufacturing. Tax the rich and the companies properly, and use it to subsidize American manufacturing. That’s what China does.
The charts clearly show Biden was making progress building factories, but GOP voters are brainwashed into thinking Republicans give a shit about people or our national security and supply chains.
Darwinism.
The manufacturing renaissance was always a flop. New factories will be robot-staffed anyway.
Instead we get AI slop and noise factories. Let’s all live next to vast rectilinear complexes sucking water and power. Bubble incoming. As with drones displacing big mili-tech, micro solutions will obsolete much of this, but not before the usual suspects have ultra-lined their pockets.
p.s., AI will flood the spaces of human-originated content with smooth, anodyne songs, books, emails, greeting cards, etc., collapsing the value of the human role. So we will sit with inboxes crammed with endless low-cost content, which hopefully will occupy us while we contemplate no jobs.
Its insane that we are running this experiment with Tariffs again, after it has been proven many times throughout history not too work.
Even more ridiculous is that the USA consciously exported its manufacturing overseas over the last 30 years in search of “higher returns” and the promise of “service jobs”, all voted in by the majority believing they could get something for nothing.
Now that we are uncompetitive and have taught and enabled the rest of the world, the US citizenry has amnesia and wants to reverse the clock. The joke is on the US – it turns out that selling your knowledge and skills for paper IOUs doesn’t work out so well long term. Time to get back to work and stop believing fantasies
/rant off
It’s not an experiment. It’s a recurring tantrum.
It;s a clever rug-pull.
our comparative advantage in manufacturing is meth labs and tweekers walking around like zombies on the village greens in small towns, coast to coast.
Manufacturing for the sake of jobs fails to appreciate the impact of robotics. As a nation we’ve always excelled at innovation by attracting the best and brightest. Now they’re not welcome.
yes robotics took more factory jobs people realize. I worked in automotive batteries 20 years ago and many many many jobs were replaced by technology twice the output with 1/2 the people. I imagine it is even more pronounced now. and the technology made it so you needed engineers and material handlers instead of craftsmen and machinist. So you end up with factory jobs in a terrible work environment that pay a little more than walmart. You will never bring back the skilled machinist and skilled tool and dye makers at the level they were in the 70s those jobs for the most part no longer exist. You now need engineers and to get them you need a educated work force so the us can no longer compete. I would be curious to see the usa students take the chinese goakao and what the pass rate would be.
For about 3 decades, it was cool to be smart, but the stupids rose up in a wave…
Absolutely fascinating data. Among other business efforts, we run a farm. Just installed solar panels, and upgraded water-well systems. The solar panels and their related electronics and electrical material was Chinese made. The deep-well pump was Chinese made. Only the water-tank was made in USA, and it was a typical “last one available, we aren’t getting anymore of this model” from local supplier. We encounter this phenomenon regularly (buying the last unit available).
Just yesterday, priced out a large-memory desktop computer, with AMD Ryzen processor, and 32-gigabyte VRAM Nvidia video card – to run a localized 30-billion parameter open-source AI model. 32-gig ram system, last one in store, has two memory slots empty, so two 16-gig DDR5 memory sticks can be installed to get 64 gigabyte RAM, essentially the minimum needed for the model. None of the hardware is made in North America, near as I can tell. The two sticks of 16 gigabyte DDR5 memory is over $700! This is insane, but guys tell me the datacentre buildout is hovering up all the memory chips.
Also, trying to buy a couple of vehicles. This is a curiously difficult exercise. Since we are in Canada, we are not sourcing any product from USA if we can possible help it. War is war. This means Japanese or European. The late-model, “pre-owned” Toyota Tacoma and Tundra trucks are insanely priced – used trucks at dealer, selling for over $70,000. Only a few on the lot. The local Mercedes dealer has two pre-owned vehicles in the pre-owned display, both more than $60,000 Cdn. These are serious numbers – a truck and car, will exceed the price we paid for a northern waterfront property, in 2015! This is also insane.
Your macro-level data dovetails exactly with the significant economic shifts we are seeing at the micro-economic level. The K-shaped economic phenomenon is real. Businesses plugged into global-supply/global-demand chains are often doing very well, and seeing strong growth. But local working folks, are giving up their dogs to the Humane Society, because many folks are being stretched on their food-budgets.
That is just sad.
The “efficiency” savings are coming from companies downloading their work-effort to customers, and governments are doing the same thing. Corporate income tax returns must be filed electronically, now. If a company files it’s tax return on paper, the company get’s an immediate $1000 penalty. This is also just insane – but it shows where the “government efficiency” improvements are coming from. Tax returns will be checked/verified by AI, and forced electronic filing means clerks can be pensioned-off, and senior civil-servants can put their feet up on the desk, and have a little nap. (Nothing new there, I suppose…)
Trying to bring manufacturing back to USA by harming global trade and North American supply/demand chains with tariffs is truly insane – absolutely certain
to have the opposite effect. We are seeing changing economics everywhere, as these curious transitional effects are rolling thru. Trump’s tariffs and trade-war nonsense is so profoundly stupid, that it is jaw-dropping. It means farmers will choose Kubota instead of John Deere. It means real harm to USA auto makers – Ford, GM, Stellantis, and to all their up-stream OEM’s, as vehicle demand shifts. And the new-tech that every business needs, will be sourced from China – solar panels, electronic controllers, water-pumps, irregation systems, and the advanced computers running AI software (Meta’s “Muse Glimmer” model has been open-sourced, runs locally, and can be downloaded right now from Hugging-Face, under an Apache 2.0 open-source license) – all this new hardware bypasses USA, and it’s absurd, abusive economic strategies.
Your data showing collapsing manufacturing construction spending really is an eye-opener. I see this change at the micro-level, and now it is starting to become visible at the macro level. More and more, Trump looks like a crazy old man, trying to turn back the clock to the 1950’s, but without the right demographics or economics. It’s just making for insane and sad scenarios all around.
well said — Manufacturing is so different than it was in the 70s and the education system since no child left behind is not ready to handle the change. and Kubota is as good as or maybe better than a John Deere I sure liked mine. tough as anything and repair parts are actually cheaper. I would walk right by any american made car to buy a Mazda or Toyota or Canadian made Honda and did.
We are witnessing the fall of the American empire which was established by the use of military power, replaced by the Chinese expanding empire created by economic power.
May you live in interesting times.
Where are the electronics for these data centers being fabricated? Taiwan, Korea and other Asian countries? Hasn’t US manufacturing benefited at Micron, Nvidia, Intel or has this been mostly offshored?
The data shows manufacturing spending bubbled in Biden’s administration, most likely in response to COVID. Data centers arrived and competed for construction labor. The business model for adding manufacturing may no longer be feasible when data centers are competing for construction resources (land, finance, equipment, and labor).
McKinsey estimates that a large data centre creates 100 jobs post construction, whereas a large car plant would have employed 5000. So whilst this construction looks great now it is not leading to sustainable employment.
…thats even before you add in the much richer supply chain associated with building a car compared to a chip.
bwahhhhhhh. MCKINSEY. they make the wizard of oz seem like a forthright man. thanks for the chuckle of the day.
and the data center eliminates well over 100 white collar jobs
You’re attempting to make a supply-side argument. Have ‘them’ build what you think is best, including for future workers. It’s easy, as long as ‘someone else’ comes along after the fact to buy the output.
But maybe large car plants aren’t being built here in America for demand reasons? They can’t/won’t build cars that we want to buy at prices we’ll pay for the decades it will take to make building that “sustainable” new car plant worthwhile.
It’s a market system. All individual players may not survive, but in the long run – it works pretty well.