The U.S. manufacturing sector has been a significant driver of job creation over the past four years, thanks to federal incentives and mega-trends such as nearshoring and the clean energy boom. While the pace of manufacturing announcements has slightly decreased from its 2022 peak, the sector’s growth outlook remains robust, irrespective of the upcoming U.S. presidential election results, according to Savills’ September Manufacturing Report.
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two-thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. Although the growth pace has slowed since peaking at 350,000 new jobs in 2022, 2024 is expected to see just over half that number.
Federal Incentives and Tariffs Fueling Growth
The U.S. manufacturing revival is fueled by $910 billion in federal incentives, including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act. Much of this funding has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Geographical Hotspots and Nearshoring Trends
Certain geographical regions will see greater manufacturing growth than others. Just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. These states are Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Meanwhile, Mexico’s manufacturing sector has seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor. Over the past four years, Mexico has launched 27 new plants, each creating over 500 jobs.
A Strong Outlook for U.S. Manufacturing
The U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election. This is because both candidates favor protectionist trade policies, and significant changes to federal incentives would require a single party to control both the legislative and executive branches. Future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, according to Savills.
