President Joe Biden tours the TSMC Semiconductor Plant in Phoenix, Arizona on December 6, 2022.
Yesterday, the Commerce Department released data on construction in April. It showed that factory construction is continuing to fall. In nominal terms, it dropped another 1.2 percent in April from its March level. Adjusting for inflation, the decline would be roughly 1.3 percent.
Factory construction has been on a downward path since the third quarter of 2024. It is now down by close to 27 percent from its recent peak.
Source: US Bureau of Economic Analysis Chart by Federal Reserve Bank of St. Louis (FRED)
It is striking that we have seen this plunge even as Donald Trump is boasting about a manufacturing boom. This turns reality on its head.
As I’ve pointed out in past notes, there was an unprecedented boom in factory construction under Biden. The peak in 2024 was well over twice the pre-pandemic level. This boom was driven by three major bills that Biden was able to get through Congress: his bipartisan infrastructure bill, the CHIPS Act, which provided incentives to build advanced semiconductor manufacturing in the United States, and the Inflation Reduction Act, which provided support for clean energy and EVs.
This boom went largely unnoticed by the media. As a result, most people never realized it took place.
In any case, with Trump quite explicitly trying to reverse most of Biden’s policies, the boom is going in reverse, with factory construction dropping rapidly. Trump may not yet be aware of this reality, but the rest of us are.
Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack.
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