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.
Related Posts
August 28, 2026: The BLS Annual Benchmark Revision for March 2026 Is -178,000 Private Jobs
The total revision was -79,000. This is the smallest benchmark revision since 2021.
August 30, 2026: Trade Deals Are Picking Up Globally, Just Not with Trump
Trump fosters new deals for India and Canada, not the US.
September 1, 2026: More Trade War Fallout, BYD Inquires About Buying a Canada Stellantis Plant
BYD is investigating buying an idled Stellantis plant near Toronto.
I don’t see Trump’s tariffs as productive and his Trade Wars with Europe and Canada are imbecilic…
But there’s a HUGE flaw in Mish’s use of the factory construction data and it’s this…
…some factories cost MUCH more to build than others.
So take a look here:
https://home.treasury.gov/news/featured-stories/unpacking-the-boom-in-us-construction-of-manufacturing-facilities
You can send factory construction spending to the moon with little more than a handful of chip foundries…which is exactly what happened.
Fun Fact: The Census bureau which gathers this data considers the extremely sophisticated water purification and vacuum systems installed in chip foundries – the cost of which can exceed a billion dollars per facility – to be HVAC equipment and *not* capital goods (which, of course, they are). As a result, those systems are included in the construction costs.
Note: Actual manufacturing data has not been terrible in 2026 and according to the BLS the sector has added 56K jobs. Much of this could just be demand pull resulting from fears of greater disruption and escalating costs in the future (the spike in the trade deficit could be similar) – but for the moment the manufacturing sector is one of the better performing ones in the economy.
I work for a US based industrial electronics manufacturer. We’re getting increased interest in our products because of an FCC rule where AGVs and robotics must have a certain percentage of US sourcing.
I don’t think our sales have increased yet because we have a long sales cycle, but this is very promising for us.
This is just a sample of one, but I figured a real-life example might hold some value in the discussion.
The garbage and refuse that comes out of this administration’s collective mouth is falling flat. Only AI is keeping the numbers afloat but the labor market is tipping over now as well. Most of the data centers built now will be useless in 5 years. Remember the first Motorola mobile phones and then the Nokia phones a few years later ?
Donald J. Epstein, Potus of pax dumbfuckistan. democracy works. majority of amerikans are assholes. they elected him. here in upstate NY we are calling lake ontario, “lake epstein”. for the nit wits out there, the terrorist us military have been nothing more than grifters since st. ronnie raygun tripled the debt and doubled the department of war, in 8 lousy years. in peacetime.
Him and his “Star Wars” – he would have got along with Kegsbreath.
Cartoonish view of war.
Where does public infrastructure construction spending (roads, etc.) appear in these statistics? Biden’s Infrastructure Investment and Jobs Act (IIJA) pumped $550 billion starting around late 2021…. So, the “Covid Recovery” meme obscures the fact that Congress deliberately chose an infusion of public spending to help stimulate that recovery. The CHIPS act then tried to take over in late 2023, but was slow to get money in the pipeline. Nonetheless, a lot of projects front-runned anticipated awards because eligible projects included many already under construction (see: CHIPS Act: U.S. Chip Industry’s Quiet Progress – IEEE Spectrum ). That said, a lot of the CHIPS money didn’t get out the door until after Trump took office in January 2025. Republicans were only too happy to take credit for this spending. C’est la vie.
correct. only one quibble. red v blue differences are splitting cunt hairs. one big beautiful uniparty of warmongering grifters. from bottom to top. farmers to welfare queens……..cops and firemen to our heroes in uniforms. total grifters. democracy works. grifters elect grifters.
You have to give taco credit for consistency!
Never met a business he can’t bankrupt
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”.
Bitcoin today certainly is shouting that this is the case
Gold and the US dollar are responding to Waller comments that Fed will hold. As I’ve said before, they are trying to increase inflation by any means they can.
We just had a hot ISM and Fed will still hold. Why people are buying the US 10 and 30Y treasuries on this news is perplexing. Could be late summer pre-holiday slop moves. Volumes are light.
I would not be surprised if Trump fakes a weak jobs report to stop the hikes.(revised of course several months later).
USA = bannana republic.
The “debasement trade” is alive and well.
Armstrong’s prediction of $8,000/oz. by the end of next year still looks good to me.
i’m just waiting for the new Trump dollars to be issued in 2028. he’ll make your old dollars with a due date to use or become worthless. this is how banana republic/empires usually go.
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.
There’s more where that came from, for him to steal
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?
Because it worked decades ago, when most of the world had agriculture based economies. Now many are industrial economies and better at it.
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.
We can, but we don’t and we won’t and you and I both know it.
Owned any Usonian car recently?
“export the things were good at”
“We” are; weapons that don’t work, policies that work even worse, and all in the name of Is-Ra-El.
By the way sumthin’, “free trade” is retarded and only the truly retarded believe that it works. Capital doesn’t give a wet slap about “comparative advantage”, and if we truly “can’t make stuff cheaper than the broke-dick-broke-ass third world”, then we are well and truly fucked.
Well higher education was one thing people were coming to the us for. Trumps put a crimp on that.
If we could produce anything cheaper we would already be exporting it. We have a high standard of living. Everything cost more. We can not compete with the third world where people will work for a lot less. Look at the textile industry in the south in the 70s.
Protectionism is a horrible idea. Embracing globalization is genius.
Ah yes, Trump’s genius was simply misguided. Good example of Trump sanewashing, usually the job of the MSM
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.
Too many male roommates for my taste.
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.
uniparty red v blue is like pro wrestling, kid. you cannot be that stoopid can you?
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.
The Industrial Revolution would have never happened in the US without tariffs. However, all that it means is that it worked in the 19th century to create a new means of production that only a couple of other countries had established.
no income tax and us gov was selling off land to finance itself. do away with income tax and start selling off state and fed land and tariffs might work.
our comparative advantage in manufacturing is meth labs and tweekers walking around like zombies on the village greens in small towns, coast to coast.
Once the data centers are obsoleted, the next trendy occupation can be said tweekers stripping them for copper wiring and such.
But never fear, the new Chinese overlords will offer such amenities as total surveillance, robot minders, and towns as clean and aesthetically pleasing as an autoclave.
The trump administration already offers most of that, except for the clean towns and running trains.
lived in phoenix during the panic of 2008 and great depression in r/e there that followed. tweekers would climb up on our roofs to strip the a/c for copper. caught a few on my rentals and my own home. in good hoods downtown. i expect the repeat to happen. my next door neighbor shot a tweeker dead in his backyard. cops down there did nothing.
We should stick to what we know best
HAHAHA. by the looks of many of my boomer pals kids, i’d say we have an army of fat fucking morons to get the job done.
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…
It’s ironic that MAGA has supporters who are libertarian tech-maximalist post-humanist, and others who are paleo-luddite. It has everything but a reasonable sensible core. That apparently wouldn’t fit the personality type.
bingo. winner comment of the day. i lived in bay area for long time. those twats out there are almost not human.
For years I have been telling students, “buy the robot that will eat your job.” I meant innovation and tech in general, but now it is pointedly robots. I’ve bought some BOTZ ETF, which has international holdings, partly focused on industrial robotics.
Too woke, they can go make some other woke country rich.
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.
I just left a rental parking lot with a Japan made car after getting into a US made one: it didn’t have Car Play, no auto AC, no auto unlock at approach, no start button. It felt so 20th century!
haven’t bought amerikan auto since the carter administration. pieces of shit.
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.
That economic power is what propelled the USA into the American Century. Such fun memories I have of what it was, it’s big-heartedness. But by the early 60s, the seeds were already there. Offshoring (of manufacturing and printed dollars) was already happening.
it was always a world wide empire. just great propaganda after the world wars for the nit wits to lap up like unweaned whelps.
Chinese expanding by MANUFACTURING power.
You might want to give the open source LLMs DeepSeek or Kimi a try, as their memory requirements are about half. Yes, neither is made in the USA.
Our local post critic will surely be by soon to award you a three Mishelin star for that most excellent post. Thanks for sharing your extensive insights.
every class has the kiss ass and know it all. MPO is smart but i find him laughable. mish is like a hundred college profs i’ve had over the past 40 years of attending college(for fun). very smart and insightful and learn a great deal from. i kind of miss the days when he wrote more about investing ideas. and the commenters were sharing stock picks………..more often. now the folks are all so uptight. like the empire itself.
I’m curious of your take on Danielle Smith’s (Alberta PM) recent address. She seems at odds with Ottawa. She intends to form and chair the “Alberta Next” panel. She’s advocating for resource access to the coasts and repeal of many left leaning laws of late. Apparently, she wants a greater voice in export tax language. She speaks of equal “federal transfers and equalizations” as if Alberta is left in the cold. She hints that a “citizen led” referendum petition (with requisite votes) is on the table to entertain separation. Much of this might be bluster in advance of coming meetings.
Premier Danielle Smith speaks to Albertans on path forward with Ottawa – May 5, 2025
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?
Intel is big, but not the leader in process technology. It has just recently started to manufacture chips for other companies. Micron makes only its own chips. Nvidia always outsourced the production of its chips. AMD spun out its chip making business because it required huge investments that ate its profits, when they happened then.
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.
Until it doesn’t.
Data centers aren’t about employment – they’re about providing stuff for your smartphone.