US Manufacturing Construction Spending Plateaus in 2026 After Historic Surge
U.S. manufacturing construction spending has entered a period of consolidation and slight decline in 2025 and 2026, following a historic multi-year surge. Under the Biden administration, spurred by post-pandemic reshoring and legislative catalysts like the CHIPS Act and the Inflation Reduction Act (IRA), annual average manufacturing construction spending skyrocketed over 200%, rising from $75.5 billion to a peak average of $235.6 billion in 2024.
However, recent data shows that this historic boom has plateaued. According to quarterly and monthly Census Bureau data, manufacturing construction spending peaked in the third quarter of 2024 and has trended downward. Industry economists attribute this deceleration to the winding down of first-wave megaprojects, the high cost of capital (with the U.S. 10-year Treasury yield at 4.45% and the Federal Funds rate at 3.63% as of May 2026), and headwind pressures from trade policies and tariffs on construction inputs like fabricated metals.
Despite the near-term stagnation, industry experts and construction forecasts emphasize that the long-term pipeline remains robust. Large-scale semiconductor fabrication plants and clean energy facilities have exceptionally long construction timelines (often 2 to 3 years or more), meaning that while new construction starts have risen, they will take several years to fully materialize as operational capacity and show up in the hard economic data.